External failure costs are incurred after which event?

External failure costs are associated with defects that occur after a product has been delivered to the customer. These costs arise when a product fails to meet quality standards in the eyes of the customer, leading to issues such as returns, complaints, warranty claims, and potentially damage to the company's reputation.

When a product failure reaches the customer, it signifies that the product has not performed as expected or required, which triggers these costs. Additionally, these can include the expenses related to service repairs, recalls, and loss of customer goodwill. By emphasizing the occurrence of failures after the product has left the manufacturing facility, it highlights the importance of ensuring that products meet quality standards before they are delivered to customers to avoid incurring these significant costs.

In contrast, prevention actions, quality evaluation, and production completion relate to earlier stages in the production process where costs are focused on avoiding failures rather than addressing them post-delivery. Thus, understanding the timing of external failure costs emphasizes the importance of proactive quality management in operations.