Payment Terminal & Retail Hardware worked example

Rework Cost at 5.75% first-pass failure rate: a worked example in payment terminal & retail hardware

Push first-pass failure rate up to 5.75% and the picture changes. This example computes every intermediate figure at that operating point. Use it to weigh rework spend against process improvements that would raise first-pass yield on the assembly line.

The inputs for this scenario

  • Terminals built: 10,000 units (unchanged)
  • Rework labor and parts per unit: 22 $/unit (unchanged)
  • First-pass failure rate: 5.75 % (raised for this scenario; the documented default is 5)
  • Rework station setup: 2,000 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Total rework cost = terminals built x rework cost per unit x first-pass failure rate% + station setup) to the inputs above produces each figure below.
  • At this operating point the engine returns 14,650 $ for total rework cost, the number this scenario is built around.
  • At this operating point the engine returns 1.47 $ / piece for rework cost per unit.
  • At this operating point the engine returns 12,650 $ for variable rework cost.
  • At this operating point the engine returns 2,000 $ for fixed rework cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where first-pass failure rate sits at 5% and the headline result is 13,000 $, this scenario comes in 12.69% above the baseline at 14,650 $.
  • It computes total rework spend as volume times per-unit rework cost times first-pass failure rate, plus fixed station setup, then divides by terminals built to get rework cost per unit produced. 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 rework cost: 14,650 $ (headline result)
  • Rework cost per unit: 1.47 $ / piece
  • Variable rework cost: 12,650 $
  • Fixed rework cost adder: 2,000 $

Run it with your numbers

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

Last reviewed 2026-05-12.