Calculating the Cost of a Recall – 14 costs
Calculating the cost of a recall before it happens will help your executives understand how much to allot toward preventing a recall.
You may think your company is under the government’s radar.
But, you are wrong!
Almost one-third recalls conducted in 2014 are from small companies under 5 employees.
Using data from the FDA and USDA we worked on calculating the cost of a recall. The average market value of products recalled in 2014 was $1,563,551 with a median of$33,598. Small businesses make up the vast majority of recalled product. The visible cost of a product recall is just the tip of the iceberg. The majority of the total cost of a recall are the hidden costs as listed below:
$________________ Cost of Manufactured Goods
$________________ Product Disposal Costs
$________________ Change in Insurance Premiums
$________________ Business Interruption
$________________ Customer Reimbursement
$________________ Customer Damages
$________________ Retailer Reimbursements
$________________ External Professional Fees
$________________ Sanitizing Production Facilities
$________________ Warehousing Costs
$________________ Internal Time and Expense
$________________ Loss of Brand/Reputation
$________________ Government Fines and Penalties
- Follow FDA Warning letters and USDA Recalls to monitor actions against your competitors, suppliers and vendors.
- Contact MEIRxRS about mock audits or to audit your suppliers.
- Share this page with your colleagues.
- Ensure vacancies on your Quality team are filled quickly using full-time recruiting services
- Learn about our Quality Control Apprenticeship Program