ajaykumar.r

COPQ, is actually what you lose out of this. Out of all 1 Lakhs Plated delivered to the client you have 15k as defective, which is 1.5% and you get paid for only 85k plates so the loss made by you is worth 15k. you have already Upper limit of 10k, which means this is accomodated in profitability but another 5k is not. So here additional loss is 5k. In Actual COPQ is 1.5% which is cost of 15k plates. To think differently, What if customers cancels entre future contracts due to this addition 5K defected plates, what you lose and what is COPQ?