Enter Engineering Quality-Cost Inputs
Use annualized values for best comparison. Rework share plus scrap share should stay at 100% or less.
Formula Used
- Defective Units = Production Units × Defect Rate
- Reworked Units = Defective Units × Rework Share
- Scrapped Units = Defective Units × Scrap Share
- Internal Failure Cost = Rework Cost + Scrap Cost + Containment Cost + Downtime Cost
- External Failure Cost = Return Processing + Warranty + Complaint Handling + Field Service + Penalty/Recall Cost
- Visible COPQ = Internal Failure Cost + External Failure Cost
- Opportunity Loss = (Returned Units + Warranty Units + Field Service Cases) × Selling Price × Contribution Margin × Lost Sales Multiplier
- Hidden COPQ = Opportunity Loss + (Visible COPQ × Hidden Cost Multiplier)
- Total COPQ = Visible COPQ + Hidden COPQ
- COPQ % of Sales = Total COPQ ÷ Annual Sales × 100
- COPQ per Unit = Total COPQ ÷ Production Units
- First-Pass Yield = 100 − Defect Rate
How to Use This Calculator
- Enter annual sales, production volume, and average unit selling price.
- Add defect, return, and warranty rates using the same reporting period.
- Split defective output into rework share and scrap share.
- Fill in direct failure costs such as rework, scrap, downtime, returns, and field service.
- Estimate hidden losses using contribution margin, lost sales multiplier, and hidden cost multiplier.
- Press Calculate COPQ to display the result below the header and above the form.
- Use the chart to compare internal, external, hidden, and total quality costs.
- Export the result table using the CSV or PDF buttons for reports.
Example Data Table
| Scenario | Annual Sales | Units | Defect Rate | Return Rate | Warranty Rate | Visible COPQ | Hidden COPQ | Total COPQ | COPQ % Sales |
|---|---|---|---|---|---|---|---|---|---|
| Example Plant | $2,400,000 | 120,000 | 4.50% | 1.20% | 0.80% | $120,035.00 | $39,333.10 | $159,368.10 | 6.64% |
This sample matches the calculator’s default values, so you can test the page instantly after loading it.
Frequently Asked Questions
1. What does cost of poor quality measure?
It measures the money lost because processes fail to meet requirements. Typical elements include scrap, rework, downtime, returns, warranty, complaints, and hidden opportunity losses.
2. Why separate internal and external failure costs?
Internal failures happen before shipment and are usually easier to control. External failures reach the customer, damage trust, and often create larger recovery costs.
3. Are hidden costs always exact?
No. Hidden costs are estimates. They help engineering teams include missed margin, reputation effects, and future lost demand that accounting records may not show directly.
4. Should inspection hours be included?
Routine inspection belongs to appraisal cost, not COPQ. Extra sorting, containment, and quarantine effort caused by failures can reasonably be included in this calculator.
5. What if rework share and scrap share exceed 100%?
That would double-count defective units. Keep their combined value at 100% or less so each failed unit is assigned only once.
6. Can I use monthly data instead of annual data?
Yes. Use any period you want, but keep every input on the same time basis. The COPQ percentage will stay meaningful only when the data periods match.
7. How often should I update COPQ values?
Update them every reporting cycle, especially after process changes. Monthly reviews are common because they reveal trends early without waiting too long.
8. Can this calculator support improvement projects?
Yes. Run a baseline, then test improved defect rates, lower downtime, or reduced warranty costs. The change in total COPQ shows the financial impact.