Appraisal Costs

Quality control is a hot term these days, which is exactly why appraisal costs are an important part of a company's budget. Basically, appraisal costs would fall into processes like ensuring that products are correct, that they meet regulatory requirements and that suppliers are doing what they said they'd do.

This is important because crabby customers who get products that are not up to par come with three problems: negative comments, a desire to have products replaced and potential legal issues. As noted by ASQ, appraisal costs would also involve quality audits, which means that companies are monitoring the quality system as a whole.

So, think of appraisal costs as anything needed to monitor quality control as a whole...from inspections to repairs.