Which of the following is not a benefit category for estimating benefits?

• A. Warranty Costs
• B. Productivity Improvement
• C. Savings
• D. Avoidance

Answer: (A)

When estimating benefits, you look at outcomes that increase value or reduce future costs, such as productivity improvements, savings, and avoidance of costs. Warranty costs represent the expenses you incur to service products under warranty, so they’re a cost item, not a benefit. If reliability improvements reduce warranty expenses, that impact would be recorded as a benefit (a saving or avoidance), not as a separate benefit category called “warranty costs.” So the item that isn’t a benefit category is warranty costs.