Secondary Costs of Products

Cost of products is High, if designed unsafely

Returns and Warranty Expenses

Loss of Customer Goodwill

Cost of litigation

Loss of Customers due to injuries in using it

Cost of rework, lost time in attending to design problems

Manufacturer’s understanding of the risk in a product is necessary:

To help reduce secondary costs

To know the possible risk for purposes of pricing, disclaimers, legal terms and conditions, etc.

To know the cost of reducing the risks

To take a decision before finalizing the design.

Buyer’s understanding of the risk in a product is necessary:

To judge whether he/she wants to take the risks

To judge whether the ‘risk vs. costs’ justifies taking the risk.