Final answer:
The cost of poor-quality products discovered during the production process is known as internal failure cost. Calculating the true cost of production is a complex task affected by many factors, including quality changes and environmental impact. Companies often seek strategies to reduce these costs through quality control and process improvements.
Step-by-step explanation:
The term that best describes the cost of poor-quality products discovered during the production process is internal failure cost. This type of cost includes expenses associated with defective products or services before they are shipped to customers, such as scrap, rework, and downtime. Companies may try to minimize these costs by implementing measures for quality control and process improvement. However, determining the true cost of production can be challenging, especially in countries with government-controlled pricing or when considering historical investments like the cost of a new factory.
In calculating such costs, factors like quality change, product longevity, and the environmental impact of production and disposal play a crucial role. Striving for higher quality products can lead to increased craftsmanship, community involvement, and a shift towards high-quality, durable goods that are designed to be repaired rather than disposed of, redefining the economics of production and consumption.