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Wednesday, October 20, 2010

Meaning Of Defective Unit And Its Control

Meaning Of Defective Units

The faulty or substandard finished goods or spoilage are called defective units. Defective goods arise due to sub-standard materials, bad supervision, bad planning of production, poor workmanship, inadequate equipment, careless inspection etc.

Defective units can be rectified and turned out as good unit by re-processing. Such re-processing work may need the use of additional material, labor and expenses.

Control Of Defective Units

On noticing some defective units, a supervision work is carried out and a defective work report needs to be prepared on completion of the supervision work.The defective work report should draw details relating to department, process, defective units quantity, normal and abnormal defects, the cost of rectification etc.

Decision to rectify or dispose without rectification is made after analyzing the cost of rectification. Defective units are sold at a lower price if the cost of rectification makes the cost of finished goods larger.