Manufacturing yield vs quoted unit price
Compare the total amount you will pay, less confirmed credits, divided by the finished units that meet your agreed specification. Separate material utilisation from finished-unit yield, and establish whether losses are already included in the quotation. Request this breakdown when briefing Cambridge China Bridge.
Define what the factory means by yield
Material utilisation compares material retained in the product with material fed into the process, using the same measurement basis. Finished-unit yield compares accepted finished units with units started. Ask which measure the factory is quoting, where the process begins and ends, and whether its result includes units accepted after rework.
Ask for evidence from a comparable material, design and production route. Cutting offcuts, machining swarf, moulding rejects and finishing failures affect costs differently. A material recovery claim does not establish how many finished units will pass inspection. Use the supplier quote comparison guide for the wider quotation scope.
Establish the billable quantity
Ask whether the quoted price applies to accepted finished units, all units produced, units started, material purchased or material consumed. Agree how rejected pieces, test samples, shortages, excess production and replacements affect the invoice. Record who pays for rework and any additional production needed to deliver the agreed accepted quantity.
If the factory quotes a fixed price per accepted unit and absorbs production losses, do not divide that price by yield again. If you pay for material inputs or production attempts, losses can increase your bill. Ask whether the quoted material allowance already includes expected losses before adding a separate allowance.
Reconcile material losses and scrap credits
Request a batch material reconciliation showing material issued, material in finished goods, reusable remnants, recoverable scrap, unrecoverable losses and material still in production. Ask the factory to explain any unexplained balance. Separate unused stock from consumed material, especially when you supply the material or pay for a whole sheet, coil or batch.
Agree who keeps offcuts and scrap, how they are weighed or counted, how their value is established, and when any credit appears. Subtract only the net credit attributable to your order after agreed deductions. Do not deduct scrap retained by the factory without a buyer credit, or deduct it again if its value already reduces the quoted price.
Calculate the cost per accepted finished unit
Multiply each quoted charge by its agreed billable quantity. Add separately payable material, setup, processing, rework and inspection costs, counting each cost only once. Subtract confirmed buyer credits, then divide the net total by accepted finished units. Use consistent currencies and the same cost boundary for every supplier.
For budgeting, label the accepted quantity as an estimate and compare what happens if yield is lower or scrap credit is unavailable. For the actual result, use reconciled charges and accepted quantities. Keep this manufacturing calculation separate from the delivered calculation in the landed-price guide, then carry the agreed manufacturing total into that budget.
Close the comparison with batch evidence
Before ordering, request the supplier's billing basis, yield assumptions, material reconciliation format, scrap-credit arrangement and proposed response to a shortfall. Agree the finished-product acceptance criteria separately. Use the quality inspection guide to plan the checks; a sampled inspection result is not an exact count of every acceptable unit.
At batch close, reconcile the production record, accepted quantity, packing list, invoice and credits. Count successfully reworked units only once, and keep pending rework outside the accepted total. Compare the revised cost with your budget before approving extra charges. Send Cambridge China Bridge the quotation and available batch records for a product-specific review.
Frequently asked questions
Should I divide the quoted unit price by yield?
Only if the price is charged on inputs or production attempts and yield converts that basis into accepted output. Do not adjust a fixed price per accepted unit again when the factory already absorbs losses.
Who gets the value of factory scrap?
Agree this in writing. Scrap may remain with the factory, reduce the original price or generate a separate buyer credit. Deduct only the credit allocated to your order, without counting it twice.
Do reworked units count as accepted units?
Count them once they meet the agreed acceptance criteria. Include any rework charges you pay in the cost total. Keep units awaiting rework or acceptance outside the accepted quantity.
What if the factory cannot prove its yield?
Treat the claim as an unverified budget assumption. Request comparable batch records or an agreed trial, and establish who pays for losses or shortages before committing.