Work out quality rejection cost instantly with clear inputs, formula shown and shareable results.
The cost of a supplier quality failure is far more than the material value: it includes inspection, segregation, documentation, return logistics and the disruption of finding a replacement. Charging that cost back is what makes supplier quality improvement economically rational for them.
Rejection rate
Rate % = Units rejected / Units received x 100
Total cost
Total = Rejected units x Unit cost + Rejected batches x Handling cost per batch
Where the contract allows it, yes. A documented cost recovery process changes supplier behaviour far faster than a scorecard alone.
Add it separately, valued at the contribution margin of lost output. On a constrained line that figure usually dwarfs the material value.