Rework vs Scrap Disposition Break-Even Calculator
Material review boards constantly ask whether it is cheaper to repair a nonconforming part or scrap it and make another. This calculator compares the two on expected cost, including the share of rework that fails, and shows the exact rework cost where they break even.
Your numbers
Labor, tooling, re-inspection and any retest per piece attempted.
Share of reworked pieces that pass re-inspection.
Full cost to produce a good piece, including material and operations.
Metal or material recovery per scrapped piece.
Your results
Economics only. Rework must also be allowed by the customer, the drawing and any airworthiness or safety requirement before it is considered.
Total cost vs rework cost per piece
Sweeps Rework cost per piece from 0 to 200, holding your other inputs fixed.
Disposition cost history from your ERP
Optional: discuss reporting rework yield and scrap cost by defect code from ERP data.
Optional. The tool and every export work without this. No spam.
How to use it
Enter the quantity on hold and the all-in cost to rework one piece, including labor, fixtures and re-inspection. Enter the share that pass after rework, taken from past dispositions of the same defect. Use the full cost of making a replacement, and subtract salvage for scrap. The slider moves the rework cost so you can see how robust the decision is to changes in labor time.
The math
Scrapping and remaking costs replacement cost minus salvage per piece. Reworking costs the rework attempt plus, for the failure share, a scrap and remake. Setting both equal gives the break-even rework cost: success rate times the net cost of scrap and remake. If your actual rework cost is below that figure, repair wins on cost. Above it, scrap wins.
- Scrap path = qty x (replacement - salvage)
- Rework path = qty x [rework + (1 - success) x (replacement - salvage)]
- Break-even = success x (replacement - salvage)
How to read the result
A high success rate raises the break-even sharply, which makes a pilot lot valuable: rework ten pieces, measure yield, then decide on the rest. Also weigh factors cost does not capture: delivery dates, customer concurrence for repairs, and whether the repaired part has the same fatigue or reliability performance.
Common mistakes
Ignoring failed rework and assuming success is 100 percent, leaving out re-inspection cost, and forgetting that some customers do not allow repair without a formal concession. In regulated work, record the disposition and its approvals in the NCR and follow the contract, not just the arithmetic.
Frequently Asked Questions
Does the lowest cost always win?
No. Customer approval, safety, schedule and long-term reliability can override cost. This tool covers only the economics so the board can see the cost side clearly.
How do I estimate rework success rate?
Use history for the same defect and process, or run a small pilot lot. If you have no data, test a representative sample before committing the whole quantity.
What if scrap has no value?
Enter zero for salvage. The break-even then equals success rate times the full replacement cost.
Should overhead be included in replacement cost?
Use incremental cost where capacity is free, and full cost where capacity is constrained and the remake displaces other paying work.
If dispositions and their costs are tracked in your ERP, we can help summarize rework yield by defect and part so the success rate is evidence rather than opinion.
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