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Cost of Poor Quality (COPQ) Calculator

Total your internal and external failure costs to get the cost of poor quality, add prevention and appraisal for the total cost of quality, and see both as a share of revenue and per unit shipped.

Cost of poor quality calculator

Enter amounts for one period in one currency. Commas are allowed; use up to two decimals.

Training, FMEA, process design
Inspection, testing, calibration, audits
Scrap, rework, re-inspection
Returns, warranty, complaints
Same period, for % of revenue
Same period, for cost per unit
Cost of poor quality
127,500.00
Total cost of quality
169,500.00
COPQ as % of revenue
3.188 %
COPQ per unit
2.55
Share of total cost of quality
CategoryGroupShare
Prevention costsGood quality7.1%
Appraisal costsGood quality17.7%
Internal failure costsPoor quality50.4%
External failure costsPoor quality24.8%
Intermediate steps
StepFormulaValue
Cost of poor qualityCOPQ = internal + external failure = 85,500.00 + 42,000.00127,500.00
Total cost of qualityCOQ = prevention + appraisal + COPQ = 12,000.00 + 30,000.00 + 127,500.00169,500.00
Failure share of cost of qualityCOPQ / COQ = 127,500.00 / 169,500.0075.22 %
COPQ as % of revenueCOPQ / revenue = 127,500.00 / 4,000,000.003.188 %
COQ as % of revenueCOQ / revenue = 169,500.00 / 4,000,000.004.238 %
COPQ per unitCOPQ / units = 127,500.00 / 500002.55

Formulas used

Cost of poor quality
COPQ = internal failure + external failure
Cost of good quality
COGQ = prevention + appraisal
Total cost of quality
COQ = COGQ + COPQ
COPQ as % of revenue
COPQ / revenue × 100
COPQ per unit
COPQ / units shipped

Assumptions and limits

  • All amounts are in the same currency and cover the same period.
  • Categories follow the prevention–appraisal–failure (PAF) model. Each cost goes in exactly one category.
  • COPQ here is failure cost only, as in the ASQ definition. Some companies also count appraisal; if yours does, add it to internal failure and say so in your report.
  • Amounts are calculated in exact cents. COPQ per unit is rounded to the nearest cent.
  • Hidden costs such as lost sales or extra management time are only included if you enter them.

Worked example

Example: a plant spent 12,000 on prevention and 30,000 on appraisal in a year. Scrap and rework cost 85,500 (internal failure), and warranty returns and customer complaints cost 42,000 (external failure). Revenue was 4,000,000 and it shipped 50,000 units.

Intermediate steps
StepFormulaValue
Cost of poor qualityCOPQ = internal + external failure = 85,500.00 + 42,000.00127,500.00
Total cost of qualityCOQ = prevention + appraisal + COPQ = 12,000.00 + 30,000.00 + 127,500.00169,500.00
Failure share of cost of qualityCOPQ / COQ = 127,500.00 / 169,500.0075.22 %
COPQ as % of revenueCOPQ / revenue = 127,500.00 / 4,000,000.003.188 %
COQ as % of revenueCOQ / revenue = 169,500.00 / 4,000,000.004.238 %
COPQ per unitCOPQ / units = 127,500.00 / 500002.55

Result: COPQ is 127,500.00, which is 3.19% of revenue and 2.55 per unit shipped.

How to measure the cost of poor quality

Sort costs into the four categories

Prevention is spent to stop defects happening: training, FMEA, process design, supplier development. Appraisal is spent to find defects: inspection, testing, calibration, audits. Internal failure is found before shipment: scrap, rework, re-inspection, downgrading. External failure is found by the customer: returns, warranty, complaints, field service, recalls.

Pull the numbers from finance and the ERP where you can. Where you estimate, for example rework labour from hours × rate, write down how you estimated it.

Read the result as a trend

One period's COPQ is a starting point. Track it monthly or quarterly with the same definitions. Rising prevention spend with falling failure cost is the pattern a quality improvement programme aims for.

Use it to pick projects

Break internal and external failure down by product, line or defect type. The largest few usually account for most of the cost, which makes them the first candidates for a CAPA or improvement project.

Connect it to yield and defects

Rework and scrap show up as lost first-pass yield. If you track first-pass yield and DPMO, you can see which process steps drive the internal failure cost.

Common mistakes

  • Counting only scrap. Rework labour, re-inspection, expediting, and extra freight are internal failure costs too.
  • Putting the same cost in two categories. A re-inspection after rework is internal failure, not appraisal. Count it once.
  • Mixing periods. Annual warranty cost against one month of scrap gives a meaningless total.
  • Treating appraisal as COPQ without saying so. Definitions differ. State which one you use so trends stay comparable.
  • Cutting prevention to lower total cost. Prevention is usually the smallest category. Cutting it tends to raise failure cost later.

Frequently asked questions

How do you calculate the cost of poor quality?

Add internal failure costs (scrap, rework, re-inspection) and external failure costs (returns, warranty, complaints). In the PAF model that sum is COPQ. Adding prevention and appraisal gives the total cost of quality.

What is the difference between COPQ and cost of quality?

Cost of quality is everything spent on quality: prevention, appraisal and failure. COPQ is the failure part, the cost of not getting it right first time.

What is a typical COPQ as a percentage of revenue?

It varies widely by industry and by how thoroughly costs are counted, so a published benchmark is rarely comparable to your own number. Compare your result with your own previous periods using the same definitions.

Should appraisal costs be part of COPQ?

In the ASQ definition, no: appraisal is a cost of good quality. Some organisations include it because inspection only exists because defects might occur. Either is fine if you state it and stay consistent.

Why does the calculator work in cents?

Money is added in whole cents so totals don't pick up floating-point rounding errors. Only ratios such as percent of revenue use decimals.

Sources

  • Juran, J. M. and De Feo, J. A., Juran's Quality Handbook, McGraw-Hill — the cost of poor quality.
  • Campanella, J. (ed.), Principles of Quality Costs, ASQ Quality Press — the prevention–appraisal–failure model.
  • ASQ, Cost of Quality (COQ) — definitions of prevention, appraisal, internal failure and external failure costs.

Results are computed in your browser from the published formulas named above. They are an engineering aid, not a substitute for the governing standard, your drawing, or your customer's requirements.

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