Quality Failure Cost Planner methodology

currentFailures = produced units × current failure rate

proposedFailures = produced units × proposed failure rate

currentFailureCost = current failed units × (scrap cost + rework hours × loaded labour rate + warranty cost − recovered value)

proposedFailureCost = proposed failed units × (scrap cost + rework hours × loaded labour rate + warranty cost − recovered value)

programmeBenefit = maximum prevention spend − prevention programme cost

maximumPreventionSpend = current quality failure cost − proposed quality failure cost

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

• All inputs must be finite and remain inside the visible non-negative validation boundaries.
• Capacity and demand fields that represent physical units reject fractional values where the engine requires whole units.
• Rates remain inside the closed range from 0% to 100%.
• Unreachable contribution, crossover or payback thresholds return an explicit unavailable state rather than Infinity.
• Option comparisons reject an infeasible option when its entered capacity is below the required workload.

Produced units minimum

producedUnits ≥ 0 units/period — A lower value is rejected before calculation.

Produced units maximum

producedUnits ≤ 100,000,000 units/period — A higher value is rejected before calculation.

Current failure rate minimum

failureRate ≥ 0 decimal fraction of produced units (1 = 100%) — A lower value is rejected before calculation.

Current failure rate maximum

failureRate ≤ 1 decimal fraction of produced units (1 = 100%) — A higher value is rejected before calculation.

Scrap cost per failure minimum

scrapCostPerFailure ≥ 0 currency units/failed unit, ex tax — A lower value is rejected before calculation.

Scrap cost per failure maximum

scrapCostPerFailure ≤ 10,000,000 currency units/failed unit, ex tax — A higher value is rejected before calculation.

Rework hours per failure minimum

reworkHoursPerFailure ≥ 0 hours/failure — A lower value is rejected before calculation.

Rework hours per failure maximum

reworkHoursPerFailure ≤ 100,000,000 hours/failure — A higher value is rejected before calculation.

Loaded labour cost per hour minimum

loadedLabourRate ≥ 0 currency units/rework hour, ex tax — A lower value is rejected before calculation.

Loaded labour cost per hour maximum

loadedLabourRate ≤ 10,000,000 currency units/rework hour, ex tax — A higher value is rejected before calculation.

Warranty cost per failure minimum

warrantyCostPerFailure ≥ 0 currency units/failed unit, ex tax — A lower value is rejected before calculation.

Warranty cost per failure maximum

warrantyCostPerFailure ≤ 10,000,000 currency units/failed unit, ex tax — A higher value is rejected before calculation.

Recovered value per failure minimum

recoveredValuePerFailure ≥ 0 currency units/failed unit, ex tax — A lower value is rejected before calculation.

Recovered value per failure maximum

recoveredValuePerFailure ≤ 10,000,000 currency units/failed unit, ex tax — A higher value is rejected before calculation.

Prevention programme cost minimum

preventionProgrammeCost ≥ 0 currency units/decision period, ex tax — A lower value is rejected before calculation.

Prevention programme cost maximum

preventionProgrammeCost ≤ 10,000,000 currency units/decision period, ex tax — A higher value is rejected before calculation.

Proposed failure rate minimum

proposedFailureRate ≥ 0 decimal fraction of produced units (1 = 100%) — A lower value is rejected before calculation.

Proposed failure rate maximum

proposedFailureRate ≤ 1 decimal fraction of produced units (1 = 100%) — A higher value is rejected before calculation.

• All operating volumes, rates, workload, capacity, time, cost and contribution values are supplied by the user.
• Money inputs use one consistent ex-tax basis and every record refers to the same operating period.
• Demand realisation, recovery, hours saved and expected unit rates are scenarios, not forecasts or benchmarks.
• Committed sunk cost is disclosed but excluded from make, buy, outsource and hire incremental economics.
• The shared engine retains raw precision and display formatting never feeds back into calculation.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

• Results depend on complete and comparable incremental cost, capacity and operating records.
• The model does not forecast demand, service quality, employee performance, supplier reliability or disruption duration.
• A positive result or short payback does not establish implementation feasibility or guarantee a commercial outcome.
• The planner does not replace operational, accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

1. 2026-07-31: Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.