Yielded cost is defined as cost divided by yield and can be used as a metric for representing an effective cost per good (non-defective) assembly for a manufacturing process. Although yielded cost is not a new concept, it has no consistent definition in engineering literature, and several different formulations and interpretations exist in the context of manufacturing and assembly.

In manufacturing, yield is the probability that an assembly is non-defective. To find the effective cost per good assembly that is invested in the manufacturing or assembly process, cost is accumulated and divided by yield.

This paper reviews and correlates existing yielded cost formulations and presents a new method that enables consistent measurement of sequential process flows. This new method views the yielded cost associated with an individual process step (step yielded cost) as the change in the process’s yielded cost when the step is removed from the process. This approach is preferred because it incorporates upstream and downstream information and because it provides a specific process step’s effective cost per good assembly that is independent of step order between steps that scrap defective product (i.e., test steps).

Conventional wisdom dictates that the best way to improve a process is to increase the yield of the lowest yield step. The new approach developed in this paper produces an auxiliary cost that can be used to determine the best method of improving processes that, for complex processes, does not always correspond to improving the lowest yield step.

Simple and complex assembly process examples are presented to demonstrate the interpretation of yielded cost. The new approach is applied to a microwave module (MWM) manufacturing and assembly process example.

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