What is the cost of quality in project management?

The cost of quality encompasses all costs incurred to ensure quality and the costs resulting from poor quality. It has two categories: the cost of conformance, which is money spent to prevent defects and includes prevention costs like training, process improvement, and quality planning, and appraisal costs like inspections, testing, and audits. The cost of nonconformance is money spent because of defects and includes internal failure costs like rework, scrap, and retesting, and external failure costs like warranty claims, liability, and reputation damage.