The following variables represent the fractional components of the Cost of Quality model:
They add to 100% so:
We want to calculate the relative increase in production when rework is reduced:
The ratio of appraisal to production costs is assumed to be the same in both cases. This assumes that, on average, appraisal hours are proportional to development effort.
A2 can be replaced by:
Let
Therefore,
Solving for x gives:
Since x is the ratio of the increase in production, x − 1 is the productivity improvement. For example, if production rises by a factor of 1.25, the productivity improvement is 25%.
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