Supplier Quality, Development & Audits worked example

Source Inspection Cost at 65% lot coverage inspected on the visit: a worked example in supplier quality, development & audits

Here is what the math looks like when conditions slip. We hold every other input steady and drop lot coverage inspected on the visit to 65%, then walk the calculation through step by step. Estimates the cost of inspecting and releasing parts at the supplier's site before shipment.

The inputs for this scenario

  • On-site inspection hours per visit: 8 hours (held at the documented default)
  • Loaded inspector hourly rate: 95 $/hr (held at the documented default)
  • Lot coverage inspected on the visit: 65 % (the input this scenario stresses; the baseline uses 90)
  • Coordination and travel adder: 600 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Total source inspection cost = inspection hours x hourly rate x lot coverage% + coordination adder.
  • Total source inspection cost works out to 1,094 $ at these inputs, and this is the headline figure for the scenario.
  • Source inspection cost per unit works out to 137 $ / piece at these inputs.
  • Variable source inspection cost works out to 494 $ at these inputs.
  • Fixed source inspection cost adder works out to 600 $ at these inputs.

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 14.8% below the baseline at 1,094 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to lot coverage inspected on the visit, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It models a single visit at an average rate; it doesn't capture rework, retest, or the cost of an escape if the sampled coverage misses a defect.

Results at a glance

  • Total source inspection cost: 1,094 $ (headline result)
  • Source inspection cost per unit: 137 $ / piece
  • Variable source inspection cost: 494 $
  • Fixed source inspection cost adder: 600 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Source Inspection Cost calculator, set lot coverage inspected on the visit to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.