ABSTRACT
The cost recovery occurs in the situations where we can prove either the supplier or the customer produced the issue. Recovering money from customers can become a cause celebre unless the customer agrees they were at fault. Also notice that cost recovery will allow us to offset a negative to the bottom line, so we do have an influence on the profitability of the enterprise when we proceed to cost recovery mode. In some cases, we will have a customer attempting to achieve cost recovery from us as the supplier and we, in turn, will go after a supplier if they are indeed guilty of an unauthorized process or product change. Interestingly, we never accounted for the cost of the investigation of the product we have been discussing, a form of expense or “anti-cost reduction.” We received no cost recovery from the customer because we were at fault.
