BIZOMAT Tools · Manufacturing
Scrap Cost Impact
What is scrap costing you?
Estimates the direct cost of scrap for a period.
Open the calculatorRuns in your browser. No account needed.
How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Units produced | units | Units produced in the period |
| Cost / unit | $ | Cost accumulated per unit at the point of scrap |
| Scrap rate | % | Measured scrap rate |
What each input means
Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.
What this means: Units produced
- What it is
- All units made in the period, including those later scrapped. Good output is this total minus scrap.
- Units and format
- Enter a number in units: a count of units. The form accepts 0 units or more.
- Example
- The form opens with 20000 units as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Scrap units and cost rise in proportion.
- Get it right
- Count everything produced, not only good units, or the scrap cost is understated.
What this means: Cost / unit
- What it is
- The cost already spent on one unit by the point where it is scrapped: material, labour and overhead added up to that stage.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $4.5 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Scrap cost rises in proportion.
- Get it right
- A part scrapped at final inspection carries more cost than one scrapped at the first operation.
What this means: Scrap rate
- What it is
- The share of units produced that are thrown away, measured from scrap records over the period.
- Units and format
- Enter a number in %: percent: the number is read as a percentage, so type 8 for 8 %. The form accepts 0% to 100%.
- Example
- The form opens with 3% as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Scrap units and cost rise in proportion.
- Get it right
- Type a percentage (3 for 3 %), not a fraction. Reworked units that end up good are not scrap.
Method and formulas
- Scrap units = units × scrap rate
- Direct cost = scrap units × cost per unit
Limitations
- Direct cost only; lost capacity, rework and customer effects are extra
Typical uses
- Making the case for a quality improvement
- Monthly cost-of-quality reporting
Who it is for
- Quality and production managers
What you get
- Direct scrap cost and units
- Good output
Interpreting the result
- Use the figure as a minimum value of fixing the cause
References
- Juran J. M. and De Feo J. A., Juran’s Quality Handbook (McGraw-Hill), cost of poor quality
Learn the Concepts Behind This Tool
These BIZOMAT Library readings explain the method this tool uses, with worked examples.
Method explained here · BIZOMAT original book
Why defect locations matter
What it covers: Why a tally of defect types hides causes that a map of defect positions reveals, how to record positions on parts, the kinds of defect map, and what rework is costing.
BIZOMAT tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.