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   · 2. Scrap rate. Scrap rate is "the percentage of materials sent to production that never become part of finished products." In general scrap rate can be calculated as follows Scrap rate = total scrap/total product run. The types of scrap included in the calculation may vary by company.

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   · Occasionally scrap is a finished delivered product that your customers simply don t like or worstcase it s a defective product that triggers a costly and embarrassing recall. In each case the scrapand the required rework to fix the problemcosts you money or time or both.

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