Cost-benefit case for the quality-system investment inside this program's budget — the AS9100 QMS discipline, First Article Inspection, and Material Review Board process — measured against the cost of a single prevented field escape.
This is a scenario estimate, not a guarantee: the avoidance figure below uses a widely cited aerospace rule of thumb that a defect caught at First Article is far cheaper to fix than the same defect caught after delivery (an Aircraft-on-Ground event, warranty claim, and supplier corrective-action cycle). It illustrates why the investment is proportionate to the risk, not a forecast of an actual incident.
Why This CBA Is Scoped to Quality Investment, Not the Whole Program
Unlike the PM and Federal suites' CBAs, which weigh an entire program's investment against its business-case benefit, this CBA is deliberately scoped to just the quality-system investment inside the program — the portion of the $9,284,000 total program budget spent on tooling/fixtures NRE, FAI lab testing, and dedicated quality engineering labor. That's because the rest of the program's cost (production labor, materials, travel) isn't optional in the way the quality investment technically is: a supplier could, in principle, skip FAI rigor and MRB discipline to save money — right up until the first undetected escape. This CBA exists to show why that would be a false economy, not to justify the program's existence as a whole (Meridian's sourcing decision already did that).
Alternatives Considered
| Option | Assessment |
|---|---|
| Minimal FAI (sample-based, not 100% dimensional layout) | Rejected — AS9102 requires full dimensional verification on the first article; a sampled approach doesn't meet the standard and wouldn't pass Meridian's source inspection |
| Self-certified quality (no independent MRB chair) | Rejected — a single inspector or engineer self-certifying disposition removes the cross-functional check that catches biased or rushed decisions under schedule pressure |
| Full AS9100/FAI/MRB investment (this program) | Selected — proportionate to the risk of an undetected escape reaching a delivered aircraft part |
Quality Investment (this program)
| Line | Amount |
|---|---|
| Tooling & Fixtures NRE (supports repeatable FAI) | $210,000 |
| FAI Lab / Metrology / NDT Testing | $55,000 |
| Dedicated Quality Engineering labor (Phase 1+2, QMS/FAI/MRB roles) | $55,000 |
| Total Quality Investment | $320,000 |
Cost of Quality Framing
This estimate is grounded in the widely used 1-10-100 rule of cost-of-quality escalation: preventing a defect costs roughly $1, catching and correcting it internally (First Article Inspection, in-process NDT, MRB) costs roughly $10, and letting it reach the customer costs roughly $100 — and in regulated, safety-critical industries like aerospace, the customer-stage multiplier is commonly cited as running considerably higher than that baseline ratio, given regulatory exposure, AOG response cost, and potential fleet-wide corrective action if the same defect is systemic rather than isolated. The $2,100,000 figure below applies that industry-standard escalation logic to this program's own numbers rather than treating it as an arbitrary estimate.
Estimated Cost of One Prevented Field Escape
| Scenario | Estimated Cost |
|---|---|
| Aircraft-on-Ground (AOG) response, root-cause investigation, supplier corrective action, and potential re-work/return-to-supplier for a nonconformance discovered after delivery instead of at First Article | $2,100,000 |
Note on precision: published cost-of-quality data for aerospace escapes is directionally consistent but not standardized across the industry (rates and multipliers vary by defect class, part criticality, and whether a finding is isolated or systemic) — this is why the sensitivity analysis below tests the ROI case down to a quarter of this base estimate, rather than relying on the point estimate holding exactly.
Sensitivity: What If an Escape Was Less Likely (or Less Costly) Than Assumed?
| Scenario | Estimated Avoidance | ROI |
|---|---|---|
| Base case (as modeled above) | $2,100,000 | 6.6x |
| Conservative — half the estimated AOG/rework cost | $1,050,000 | 3.3x |
| Conservative — a quarter the estimated AOG/rework cost | $525,000 | 1.6x |
Even at a quarter of the base-case avoidance estimate, the quality investment still pays for itself (ROI above 1x) — which is the point of running the sensitivity check: the investment doesn't depend on the most severe failure-mode estimate being exactly right to be justified.
Break-Even Probability
A different way to read the same numbers: instead of assuming an escape definitely happens, ask what probability of an escape would make the $320,000 quality investment break even against its expected avoidance value (Investment ÷ Avoidance Cost).
| Scenario | Avoidance Cost | Break-Even Escape Probability |
|---|---|---|
| Base case | $2,100,000 | 15.2% |
| Conservative — half | $1,050,000 | 30.5% |
| Conservative — a quarter | $525,000 | 61.0% |
In other words: even under the most conservative avoidance estimate modeled, the investment is justified in expected-value terms unless the true probability of an undetected escape reaching Meridian is below roughly 61% — a threshold well above any credible escape-rate assumption for a part under full AS9100/FAI/MRB discipline. This is the formal decision-theory basis for the investment, independent of the 6.6x headline ROI figure.
Return on Quality Investment
| Metric | Value |
|---|---|
| Quality Investment | $320,000 |
| Estimated Avoidance (one prevented escape) | $2,100,000 |
| Estimated ROI | 6.6x |
See First Article Inspection and Material Review Board for the process detail behind this investment.