Does ordinary inspection belong in poor quality cost?

No. Routine appraisal belongs in cost of quality; repeat inspection caused by a failure belongs in the appropriate failure category.

Where do customer returns belong?

Record their failure-related charges in external failure cost. Do not count a provision and its later settlement as two expenses.

The division puts the period total on a shipment basis for comparison. It is not a defect rate or a charge attached to each unit.

The failure total remains defined, but cost per shipped unit is blank until a positive shipment count is entered.

Quality calculator

Add the recorded costs of internal and external quality failures. Enter distinct failure charges and a shipment count from the same reporting period.

Total failure costs while keeping routine inspection and prevention spending outside the cost of poor quality.

Internal Scrap Cost: Gross internal scrap charges for the selected reporting period.
Internal Rework Cost: Internal rework charges, excluding scrap and other failure entries.
Other Internal Failure Cost: Recorded internal containment and repeat testing, excluding routine appraisal.
External Failure Cost: Recorded post-delivery failure charges, counted once.
Shipped Units: Shipment count for the same reporting period.

Best suited to monthly failure cost review, containment expense reconciliation.
Recovery credits and unrecorded future exposure are excluded. This total does not establish causation or savings from a proposed project.

U.S. manufacturing runs at 75.7% of capacity (Federal Reserve, Aug 2026). New factory orders are up 8.5% year over year (Census).

Does ordinary inspection belong in poor quality cost? No. Routine appraisal belongs in cost of quality; repeat inspection caused by a failure belongs in the appropriate failure category.
Where do customer returns belong? Record their failure-related charges in external failure cost. Do not count a provision and its later settlement as two expenses.
Why divide by shipped units? The division puts the period total on a shipment basis for comparison. It is not a defect rate or a charge attached to each unit.
What if nothing shipped this period? The failure total remains defined, but cost per shipped unit is blank until a positive shipment count is entered.

Last reviewed 2026-10-06.