Manufacturing Master Data & Data Governance worked example

Data Error Cost at 40% errors reaching downstream: a worked example

Push errors reaching downstream up to 40% and the picture changes. This example computes every intermediate figure at that operating point. Use it to quantify the business case for data-quality controls by pricing the errors that slip into execution.

The inputs for this scenario

  • Erroneous transactions per period: 1,800 transactions (unchanged)
  • Rework cost per error: 42 $/error (unchanged)
  • Errors reaching downstream: 40 % (raised for this scenario; the documented default is 35)
  • Monitoring and audit overhead: 5,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Total = error transactions x rework cost x escape% + monitoring overhead) to the inputs above produces each figure below.
  • At this operating point the engine returns 35,240 $ for total data error cost, the number this scenario is built around.
  • At this operating point the engine returns 19.58 $ / piece for data error cost per unit.
  • At this operating point the engine returns 30,240 $ for variable data error cost.
  • At this operating point the engine returns 5,000 $ for fixed data error cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where errors reaching downstream sits at 35% and the headline result is 31,460 $, this scenario comes in 12.02% above the baseline at 35,240 $.
  • It computes the total per-period cost of master-data errors and the cost per erroneous transaction, separating variable rework from fixed monitoring overhead. 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 data error cost: 35,240 $ (headline result)
  • Data error cost per unit: 19.58 $ / piece
  • Variable data error cost: 30,240 $
  • Fixed data error cost adder: 5,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.