The typical U.S. Factory invests 20 to 25 percent of its operating budget in finding and fixing mistakes. One fourth of all workers fix things that are not done right. These are appraisal and internal failure cost. On the other hand, if quality standards are enforced as the item is being built, appraisal, internal and external failure costs will decrease while prevention costs will increase. The rule of thumb is that for every dollar spent in prevention, ten dollars are saved in failure and appraisal costs. Product design also is a form of prevention – problems and variation can be eliminated during the product design phase, leading to higher quality outcomes
