Product Suite

Supply Chain Glossary - P

Supply Chain Glossary - P

prevention costs

The costs caused by improvement activities that focus on the reduction of failure and appraisal costs. Typical costs include education, quality training, and supplier certification. Prevention costs are one of four categories of quality costs.

A term used to contrast two types of quality activities. Prevention refers to those activities designed to prevent nonconformances in goods and services. Detection refers to those activities designed to detect nonconformances already in goods and services. Syn: designing in quality vs. inspecting in quality.

The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. The purpose is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems.

One of the four P's (product, price, place, and promotion) that constitute the set of tools used to direct the business offering to the customer. Price is the amount charged for the product offering. The price set must take into account competition, substitute products, and internal business costs to return a desirable product margin. See: four P's.

Test Country