Measures the costs associated with defective products that need to be scrapped or reworked.

What it Measures ?

% of total cost due to scrap or rework.

Relevant StakeHolders 

Production, Quality, Finance

In-depth Use Case / Real-world Example

A company manufacturing clothing calculates Scrap and Rework Costs by tracking the cost of defective items that need to be discarded or reworked. For example, if the company spends ₹1 lakh on reworking defective products and scrapping 200 items, the scrap and rework costs help identify inefficiencies in the production process.