Supplier Quality, Development & Audits worked example

Source Inspection Cost at 99% lot coverage inspected on the visit: a worked example in supplier quality, development & audits

This scenario runs the source inspection cost calculation on the strong side: 99% lot coverage inspected on the visit, with every other input held at its documented default. A receiving quality lead uses it to budget source inspection for a critical lot that cannot be reworked after delivery.

The inputs for this scenario

  • On-site inspection hours per visit: 8 hours (unchanged)
  • Loaded inspector hourly rate: 95 $/hr (unchanged)
  • Lot coverage inspected on the visit: 99 % (raised for this scenario; the documented default is 90)
  • Coordination and travel adder: 600 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Total source inspection cost = inspection hours x hourly rate x lot coverage% + coordination adder) to the inputs above produces each figure below.
  • At this operating point the engine returns 1,352 $ for total source inspection cost, the number this scenario is built around.
  • At this operating point the engine returns 169 $ / piece for source inspection cost per unit.
  • At this operating point the engine returns 752 $ for variable source inspection cost.
  • At this operating point the engine returns 600 $ for fixed source inspection cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where lot coverage inspected on the visit sits at 90% and the headline result is 1,284 $, this scenario comes in 5.33% above the baseline at 1,352 $.
  • Use it to decide between source inspection and incoming inspection, or to quote customer-directed source inspection accurately. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total source inspection cost: 1,352 $ (headline result)
  • Source inspection cost per unit: 169 $ / piece
  • Variable source inspection cost: 752 $
  • Fixed source inspection cost adder: 600 $

Run it with your numbers

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

Last reviewed 2026-05-12.