Jewelry, Watches & Precision Luxury Goods worked example

Finishing Defect Cost at 5.75% finishing defect rate: a worked example

Push finishing defect rate up to 5.75% and the picture changes. This example computes every intermediate figure at that operating point. Use after a finishing run to calculate the cost impact of defects found during QC. Helps justify investments in better polishing equipment, plating bath maintenance, or operator training by showing the true cost of poor finish quality.

The inputs for this scenario

  • Total pieces in finishing batch: 100 pieces (unchanged)
  • Average rework or replacement cost per defective piece: 25 $ / piece (unchanged)
  • Finishing defect rate: 5.75 % (raised for this scenario; the documented default is 5)
  • Fixed quality investigation cost: 150 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable defect cost = total pieces × defect rate / 100 × rework cost per defect) to the inputs above produces each figure below.
  • At this operating point the engine returns 294 $ for total finishing defect cost, the number this scenario is built around.
  • At this operating point the engine returns 2.94 $ / piece for defect cost per piece in batch.
  • At this operating point the engine returns 144 $ for variable defect cost.
  • At this operating point the engine returns 150 $ for fixed quality investigation cost.

How this compares with the baseline

  • Against the tool's baseline example, where finishing defect rate sits at 5% and the headline result is 275 $, this scenario comes in 6.82% above the baseline at 294 $.
  • It computes the total cost of finishing defects in a batch plus fixed investigation cost, and the defect cost spread across every piece in the batch. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Total finishing defect cost: 294 $ (headline result)
  • Defect cost per piece in batch: 2.94 $ / piece
  • Variable defect cost: 144 $
  • Fixed quality investigation cost: 150 $

Run it with your numbers

  • Every input above is editable in the live Finishing Defect Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.