Which type of costs are directly related to preventing poor quality products or services?

The type of costs directly related to preventing poor quality products or services is prevention costs. These costs are incurred to ensure that processes function effectively, thereby minimizing the risk of defects or poor-quality outputs. Preventive activities include training, quality improvement initiatives, and process control measures aimed at enhancing product or service quality before any issues arise.

Investing in prevention costs is critical for organizations because it leads to a reduction in both internal failure costs—those incurred when defects are identified before the product is delivered to the customer—and external failure costs, associated with defects discovered after delivery. This proactive approach not only improves customer satisfaction but also enhances overall operational efficiency by reducing the need for corrective actions later in the process.

In essence, prevention costs are the foundation of a quality management strategy aimed at eliminating defects before they occur, ultimately fostering a culture of quality within the organization.