Scrap & Rework Cost Calculator

How the scrap & rework cost calculator works

Net scrap cost is scrapped units times base cost plus disposal less salvage. Extra rework cost is successfully recovered units times their additional rework cost. These counts are mutually exclusive and cannot exceed units started in total.

Combined quality cost adds net scrap and extra rework. Total production cost charges base cost to every started unit, adds extra rework and disposal, and deducts salvage. Accepted units are started units less scrap; no unresolved quality category is modeled here.

Base cost allocations need not equal avoidable cash loss. A salvage credit greater than the entered base plus disposal can make net scrap cost negative, and that sign remains visible. This does not estimate repeat repair attempts, inspection cost, warranty exposure or a process-quality rating.

Worked example

Thirty scrap units at $12 base cost plus $1 disposal less $2 salvage cost $330 net. Fifty different units needing $4 additional rework cost $200. Combined quality cost is $530. Total production cost for 1,000 started units is $12,170. Forty scrap units would raise combined quality cost to $640.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• ASQ: scrap and rework as internal failure costs