Supplier Quality, Development & Audits worked example

Supplier Quality Trend at 46% adverse trend severity factor: a worked example

This scenario runs the supplier quality trend calculation on the strong side: 46% adverse trend severity factor, with every other input held at its documented default. A commodity quality manager uses it to quantify the rolling cost of a degrading supplier before escalating to development.

The inputs for this scenario

  • Reporting periods tracked: 12 months (unchanged)
  • Quality failure cost per period: 2,500 $/month (unchanged)
  • Adverse trend severity factor: 46 % (raised for this scenario; the documented default is 40)
  • Scorecard review adder: 1,500 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Trend exposure = periods x quality cost per period x adverse severity% + review adder) to the inputs above produces each figure below.
  • At this operating point the engine returns 15,300 $ for total supplier quality trend cost, the number this scenario is built around.
  • At this operating point the engine returns 1,275 $ / piece for supplier quality trend cost per unit.
  • At this operating point the engine returns 13,800 $ for variable supplier quality trend cost.
  • At this operating point the engine returns 1,500 $ for fixed supplier quality trend adder.

How this compares with the baseline

  • Against the tool's baseline example, where adverse trend severity factor sits at 40% and the headline result is 13,500 $, this scenario comes in 13.33% above the baseline at 15,300 $.
  • Use it during quarterly business reviews, when ranking suppliers for development resources, or when building the case that a drifting supplier needs formal corrective action. 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 supplier quality trend cost: 15,300 $ (headline result)
  • Supplier quality trend cost per unit: 1,275 $ / piece
  • Variable supplier quality trend cost: 13,800 $
  • Fixed supplier quality trend adder: 1,500 $

Run it with your numbers

  • Every input above is editable in the live Supplier Quality Trend calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.