How do you calculate yield loss cost?

Multiply defective units by cost per unit and the capture rate, then add fixed cost. For 100 units at $45, an 80% capture rate, and $250 fixed, that is 100 × 45 × 0.80 + 250 = $3,850.

What does the capture rate represent?

It is the share of the theoretical loss you actually eat. At 80%, you recover or credit back 20% of the value through rework, salvage, or downgrade, so only $3,600 of the variable loss hits the run.

What is yield loss cost per unit?

It is total yield loss divided by the affected quantity. In the example, $3,850 across 100 units is $38.50 per piece, a useful number for comparing defect modes.

Why include a fixed disposition cost?

Scrap triggers fixed expenses regardless of quantity, such as a containment audit, sort labor, or a customer return shipment. The $250 adder captures those so the per-unit figure isn't understated.

How is this different from a scrap rate?

Scrap rate is a percentage of units; yield loss cost is the dollar impact. A 2% scrap rate means nothing to finance until you translate it, as here, into $3,850 of lost margin.

What is a good yield loss cost?

Lower is always better; world-class shops keep cost of poor quality under 1-2% of sales. Use the per-unit $38.50 figure to flag whether a defect mode is worth a corrective-action project.

OEE & Factory Performance calculator

Yield Loss Cost Calculator

Yield loss cost converts scrapped and reworked parts into the real dollars they drain from a production run. Quality engineers, plant controllers, and continuous-improvement teams use it to put a price tag on first-pass yield problems so projects can be ranked by financial impact. It matters because a defect rate that looks small in percent can be enormous in dollars once material, labor, and disposition are included. The capture-rate factor lets you model how much of the theoretical loss you actually absorb after recovery or rework credit.

What this calculator does

Estimate cost of yield loss from lost units, margin per unit, and containment cost.
Use it when yield loss cost in oee and factory performance is being put through a oee and factory performance weighted-cost review.
It multiplies defective quantity by cost per unit and a capture factor, then adds a fixed disposition cost to return total and per-unit yield loss dollars.

Formula used

Weighted cost = quantity × rate × capture factor + fixed adjustment

Inputs explained

Scrap and rework units:
Cost per defective unit:
Loss capture rate:
Fixed disposition cost:

How to use the result

Use it when scoping a quality improvement, building a cost-of-poor-quality case, or prioritizing which defect modes to attack first.
It uses a single blended cost per unit, so mixed-value product or stage-dependent scrap cost (a part scrapped late costs more than one scrapped early) needs separate runs.

Current U.S. benchmarks

U.S. manufacturing runs at 75.6% of capacity (Federal Reserve, May 2026). New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate yield loss cost? Multiply defective units by cost per unit and the capture rate, then add fixed cost. For 100 units at $45, an 80% capture rate, and $250 fixed, that is 100 × 45 × 0.80 + 250 = $3,850.
What does the capture rate represent? It is the share of the theoretical loss you actually eat. At 80%, you recover or credit back 20% of the value through rework, salvage, or downgrade, so only $3,600 of the variable loss hits the run.
What is yield loss cost per unit? It is total yield loss divided by the affected quantity. In the example, $3,850 across 100 units is $38.50 per piece, a useful number for comparing defect modes.
Why include a fixed disposition cost? Scrap triggers fixed expenses regardless of quantity, such as a containment audit, sort labor, or a customer return shipment. The $250 adder captures those so the per-unit figure isn't understated.
How is this different from a scrap rate? Scrap rate is a percentage of units; yield loss cost is the dollar impact. A 2% scrap rate means nothing to finance until you translate it, as here, into $3,850 of lost margin.

Last reviewed 2026-05-12.