# Cost of Poor Quality (COPQ) Calculator for Medical Device Manufacturers

> Source: https://netray.co/tools/medical-device-cost-of-poor-quality-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Totals prevention, appraisal, internal failure and external failure costs and shows COPQ as a share of revenue.

## Category

cost-finance

## Industry

Medical Devices

## Audience

- Quality manager
- Plant controller
- Operations director

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Annual revenue

**Key:** revenue

**Type:** number

**Default:** 40000000

**Min:** 0

**Step:** 500000

**Unit:** $

#### Prevention cost per year

**Key:** prevention

**Type:** number

**Default:** 600000

**Min:** 0

**Step:** 10000

**Help:** Training, validation, supplier development, design reviews, risk management.

#### Appraisal cost per year

**Key:** appraisal

**Type:** number

**Default:** 1100000

**Min:** 0

**Step:** 10000

**Help:** Inspection, testing, calibration, audits, lab and sterilization testing.

#### Scrapped units per year

**Key:** scrap_units

**Type:** number

**Default:** 6000

**Min:** 0

**Step:** 100

**Unit:** units

#### Average cost per scrapped unit

**Key:** unit_cost

**Type:** number

**Default:** 38

**Min:** 0

**Step:** 1

#### Rework and re-inspection hours

**Key:** rework_hours

**Type:** number

**Default:** 9000

**Min:** 0

**Step:** 100

**Unit:** hours

#### Loaded labor rate

**Key:** labor_rate

**Type:** number

**Default:** 52

**Min:** 0

**Step:** 1

**Unit:** $/h

#### Complaints investigated per year

**Key:** complaints

**Type:** number

**Default:** 420

**Min:** 0

**Step:** 10

#### Average cost per complaint

**Key:** cost_per_complaint

**Type:** number

**Default:** 450

**Min:** 0

**Step:** 25

**Help:** Investigation, replacement, return freight, reporting.

**Outputs:**

#### Internal failure cost

**Key:** internal

**Expr:** scrap_units * unit_cost + rework_hours * labor_rate

**Format:** currency

#### External failure cost

**Key:** external

**Expr:** complaints * cost_per_complaint

**Format:** currency

#### Cost of poor quality

**Key:** copq

**Expr:** internal + external

**Format:** currency

**Primary:** true

**Description:** Internal plus external failure costs.

#### Total cost of quality

**Key:** coq

**Expr:** prevention + appraisal + copq

**Format:** currency

#### COPQ as % of revenue

**Key:** copq_pct

**Expr:** if(gt(revenue, 0), copq / revenue * 100, 0)

**Format:** percent

**Primary:** true

#### Total COQ as % of revenue

**Key:** coq_pct

**Expr:** if(gt(revenue, 0), coq / revenue * 100, 0)

**Format:** percent

**Chart:**

#### COPQ vs scrapped units

**Type:** line

**X:** scrap_units

**From:** 0

**To:** 20000

**Steps:** 30

**Series:**

- copq

**Disclaimer:** Illustrative defaults only. Use your own finance data, and decide in your cost of quality procedure which items count as prevention, appraisal and failure.

## Content

**Intro:** Quality leaders need a number that finance understands. This calculator uses the classic prevention, appraisal and failure model to total your cost of quality and express cost of poor quality as a share of revenue.

**Sections:**

#### How to use it

**Body:** Gather annual figures from your ERP and finance team. Prevention and appraisal costs come from department budgets and activity records. Internal failure comes from scrap transactions and rework labor, and external failure from complaint, return and replacement costs. Enter each value, and the tool shows COPQ in currency and as a percentage of revenue. Change a single input to see the impact on the total.

#### The model

**Body:** Total cost of quality is prevention plus appraisal plus internal failure plus external failure. Prevention and appraisal are the cost of good quality, since you choose to spend them. Failure costs are the cost of poor quality, since they arise from nonconformance. The usual finding is that raising prevention spending reduces failure cost by more than it adds, though the payback varies by company.

**Bullets:**

- Internal failure = scrap + rework + re-inspection
- External failure = complaints + returns + field actions
- COPQ = internal + external failure
- COQ = prevention + appraisal + COPQ

#### Common mistakes

**Body:** Teams often count only scrap and miss hidden costs such as expedited freight, line downtime, lost capacity and engineering time spent on investigations. Another common error is mixing capitalized validation costs with annual expense without a policy. Regulatory costs from a mandated field action are external failure, but routine audit fees are appraisal. Use consistent definitions each year so the trend is meaningful.

**Cta:** If scrap, rework and complaint costs are hard to pull from your ERP, we can help review how to build this report from live data.

**Faq:**

#### What is a typical COPQ percent?

**Answer:** It varies widely by product, maturity and how many hidden costs you count. Published rules of thumb often cite a range from a few percent to well above ten percent of revenue, but your own trend matters more than a benchmark.

#### Is appraisal a good cost or a bad cost?

**Answer:** In the PAF model it is part of the cost of good quality, but heavy appraisal can signal a process that depends on inspection to find defects. Aim to shift spending towards prevention over time.

#### Where do I find scrap cost in the ERP?

**Answer:** Scrap is usually recorded through scrap or reject transactions on production orders, valued at standard or actual cost. Rework time often needs separate work orders or labor codes to be visible.

#### Should recall costs be included?

**Answer:** Yes, as external failure. Because they are rare and large, many companies report them separately so they do not distort the annual trend. The recall cost estimator on this site can help size them.

## Search terms

cost of poor quality calculator, COPQ calculator, cost of quality medical device, prevention appraisal failure cost, quality cost report, scrap and rework cost calculation, cost of quality percent of revenue, PAF model

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