IASSC Certified Lean Six Sigma Yellow Belt (ICYB) — Question 1

Al bought a handheld GPS from his local electronics store. When he entered an address it would not function. For the manufacturer of the GPS this would be categorized as what type of cost?

Answer options

• A. Internal Failure Cost
• B. Prevention Cost
• C. External Failure Cost
• D. Appraisal Cost

Correct answer: C

Explanation

The correct answer is C, as an External Failure Cost refers to costs incurred when a product fails to meet customer expectations after it has been delivered. Options A, B, and D represent different types of costs that relate to internal issues, prevention strategies, and evaluation processes, none of which apply to the scenario where the GPS malfunctioned after purchase.