Which one of the following describes how to calculate the Cost of Poor Quality for a rework loop?

To calculate the Cost of Poor Quality for a rework loop, the appropriate formula involves multiplying the defect rate by the volume and the cost of rework per unit.

The defect rate represents the frequency of defects occurring in the production process. When you multiply this rate by the volume, you determine how many units are affected by defects. Finally, by multiplying by the cost of rework per unit, you arrive at the total cost associated with addressing those defects. This calculation effectively highlights the financial impact of quality issues that necessitate rework, allowing organizations to understand the economic implications of poor quality.

This approach enables businesses to make informed decisions regarding quality improvement initiatives, focusing on reducing defects and associated costs.