Appendix D
Rework and Productivity

The following variables represent the fractional components of the Cost of Quality model:

equation

They add to 100% so:

equation

We want to calculate the relative increase in production when rework is reduced:

equation

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.

equation

A2 can be replaced by:

equation

Let

equation

Therefore,

equation

Solving for x gives:

equation

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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