Quality worked example

Cost of Poor Quality with scrap cost of 4,200 $: a worked example

Suppose scrap cost falls to 4,200 $. This page works the full calculation at that level so you can see exactly which result moves and by how much. Combine scrap, rework, warranty, inspection, and customer penalty costs into one quality-loss number.

The inputs for this scenario

  • Scrap cost: 4,200 $ (the input this scenario stresses; the baseline uses 8,400)
  • Rework cost: 5,200 $ (held at the documented default)
  • Warranty cost: 3,100 $ (held at the documented default)
  • Inspection / containment cost: 2,600 $ (held at the documented default)
  • Customer penalties: 1,500 $ (held at the documented default)
  • Shipped units: 18,000 units (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: COPQ = scrap + rework + warranty + inspection + penalties.
  • Cost of poor quality works out to 16,600 $ at these inputs, and this is the headline figure for the scenario.
  • COPQ per shipped unit works out to 0.92 $ / unit at these inputs.
  • Internal failure cost works out to 9,400 $ at these inputs.
  • External failure cost works out to 4,600 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where scrap cost sits at 8,400 $ and the headline result is 20,800 $, this scenario comes in 20.19% below the baseline at 16,600 $.
  • It adds the five failure-cost buckets into a single COPQ figure, splits it into internal (scrap + rework) and external (warranty + penalties) failure, and divides by shipped units. 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

  • Cost of poor quality: 16,600 $ (headline result)
  • COPQ per shipped unit: 0.92 $ / unit
  • Internal failure cost: 9,400 $
  • External failure cost: 4,600 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Cost of Poor Quality calculator, set scrap cost to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.