Payment Terminal & Retail Hardware worked example

Rework Cost at 3.6% first-pass failure rate: a worked example in payment terminal & retail hardware

Suppose first-pass failure rate falls to 3.6%. This page works the full calculation at that level so you can see exactly which result moves and by how much. Estimates in-line rework cost for a payment terminal build from unit count, per-unit rework cost, and first-pass failure rate.

The inputs for this scenario

  • Terminals built: 10,000 units (held at the documented default)
  • Rework labor and parts per unit: 22 $/unit (held at the documented default)
  • First-pass failure rate: 3.6 % (the input this scenario stresses; the baseline uses 5)
  • Rework station setup: 2,000 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total rework cost = terminals built x rework cost per unit x first-pass failure rate% + station setup.
  • Total rework cost works out to 9,920 $ at these inputs, and this is the headline figure for the scenario.
  • Rework cost per unit works out to 0.99 $ / piece at these inputs.
  • Variable rework cost works out to 7,920 $ at these inputs.
  • Fixed rework cost adder works out to 2,000 $ at these inputs.

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 23.69% below the baseline at 9,920 $.
  • 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. When the numbers land here, the stressed input is the lever to work; the walkthrough above shows exactly how much each output recovers as it climbs back toward the baseline.

Results at a glance

  • Total rework cost: 9,920 $ (headline result)
  • Rework cost per unit: 0.99 $ / piece
  • Variable rework cost: 7,920 $
  • Fixed rework cost adder: 2,000 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Rework Cost calculator, set first-pass failure rate to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.