Smart Home & Consumer IoT Hardware worked example

Rework Cost at 2.88% defect rework rate: a worked example in smart home & consumer iot hardware

This worked example runs the rework cost numbers for a tougher week than the baseline: 2.88% defect rework rate instead of the typical 4%. Estimates the cost of reworking defective smart home devices, covering rework labor, replacement parts, and station setup.

The inputs for this scenario

  • Units built in the production run: 30,000 units (held at the documented default)
  • Rework labor + parts per defective unit: 9.75 $/unit (held at the documented default)
  • Defect rework rate (units needing rework): 2.88 % (the input this scenario stresses; the baseline uses 4)
  • One-time line setup for rework: 3,500 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Rework Cost = Units Built x Rework Labor+Parts x Defect Rework Rate% + Line Setup.
  • Total rework cost works out to 11,924 $ at these inputs, and this is the headline figure for the scenario.
  • Rework cost per unit works out to 0.4 $ / piece at these inputs.
  • Variable rework cost works out to 8,424 $ at these inputs.
  • Fixed rework cost adder works out to 3,500 $ at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where defect rework rate sits at 4% and the headline result is 15,200 $, this scenario comes in 21.55% below the baseline at 11,924 $.
  • Use it when estimating quality cost for a run, quoting a program, or building the business case for a defect-prevention fix. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Total rework cost: 11,924 $ (headline result)
  • Rework cost per unit: 0.4 $ / piece
  • Variable rework cost: 8,424 $
  • Fixed rework cost adder: 3,500 $

Run it with your numbers

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

Last reviewed 2026-05-12.