The Hidden Manufacturing Losses Driven by Failure to Address Measurement Risk
How Measurement Risk Impacts Customer Deliverables, Recalls, and Profitability
Every manufactured product relies on measurement-based decisions. Whether the deliverable is a component, system, test result, or certificate of conformance, the final decision to release product is driven by measured data.
When measurement systems are weak—or when calibration quality is poor—those decisions become statistically unreliable. The result is an elevated Probability of False Acceptance (PFA) and Probability of False Rejection (PFR).
These risks are not theoretical. They translate directly into scrap, rework, customer dissatisfaction, regulatory exposure, and product recalls.
PFA and PFR are consequences of measurement uncertainty, calibration integrity, and decision rules applied to your customer's deliverables.

False acceptance occurs when measurement error masks a nonconformance, allowing a defective or marginal product to be released to the customer.
What Happens
Because the data appeared valid at release, organizations often discover false acceptance only after complaints, failures, or audits.
The Business Impact
Recalls driven by false acceptance are especially costly because the issue is not confined to a single lot—it often affects all product released under the same measurement conditions.
False rejection occurs when measurement error causes compliant product to be identified as nonconforming.
What Happens
False rejection is often normalized as “the cost of quality,” even though it is driven by avoidable measurement risk.
The Business Impact
False rejection quietly erodes margins while providing no improvement in customer satisfaction.
Poor calibration increases uncertainty and variability in measurement systems. When uncertainty is poorly characterized or ignored, decision rules become unreliable.
What Happens
This environment increases the likelihood of both false acceptance and false rejection simultaneously.
The Business Impact
Organizations end up paying twice: once for scrap, and again for failures that escape detection.
Many recalls are triggered not by confirmed defects, but by an inability to defend historical measurement decisions.
What Happens
When measurement integrity cannot be demonstrated, organizations are forced to assume worst-case exposure.
The Business Impact
In these cases, the recall cost is driven less by product performance and more by loss of measurement confidence.
When organizations recognize measurement risk—without addressing its root cause—they often compensate by tightening internal controls.
What Happens
This reactive approach increases PFR while doing little to reduce PFA.
The Business Impact
Measurement uncertainty should be managed analytically—not through over-control.
Calibration is the foundation of decision confidence. When calibration is treated as a commodity, decision risk increases.
What Happens
This creates a false sense of security while increasing exposure.
The Business Impact
Choose Calibration Equipment and Calibrations That Reduce PFA and PFR
A calibration provider that supports customer deliverables should:
Calibration should strengthen product release decisions—not undermine them.
Examples of Measurement and Quality Failures
History provides clear examples of what happens when measurement systems are trusted without adequate controls, validation, or risk awareness.
Patriot Missile Failure (1991, Gulf War)
A small timing error in the Patriot missile defense system accumulated over extended operation, eventually causing the system to miscalculate target position. Because the measurement error was not adequately corrected or recalibrated over time, valid threats were falsely assessed as non-threatening. The system failed to intercept an incoming missile, resulting in the loss of 28 lives.
Lesson: Small, unmanaged measurement errors can accumulate into catastrophic failures.
NASA’s Mars Climate Orbiter (1999)
The Mars Climate Orbiter was lost due to incompatible measurement units used by different teams. Navigation data appeared valid and passed review, but the underlying measurement assumptions were incorrect. The spacecraft entered Mars’ atmosphere at the wrong altitude and was destroyed, ending a $327 million mission.
Lesson: Measurement data that appears compliant can still be fundamentally wrong if underlying assumptions are not controlled.
Boeing 737 MAX Crashes (2018–2019)
The 737 MAX flight control system relied on data from a single angle-of-attack sensor. When that sensor produced erroneous measurements, the system accepted the data as valid and repeatedly commanded unsafe aircraft behavior. The result was two fatal crashes, the loss of 346 lives, and billions of dollars in financial and reputational damage.
Lesson: Overreliance on unverified measurement inputs dramatically increases the probability of false acceptance.
Common Thread
Each of these failures was not caused by a single bad component, but by systems that accepted incorrect measurement data as trustworthy. In all three cases, false acceptance of flawed measurement inputs propagated through decision-making systems until the consequences became irreversible.
These events underscore a critical reality: measurement confidence is inseparable from risk management. When calibration and measurement controls fail, the cost is measured not only in dollars—but in lives, trust, and long-term credibility.
Final Thoughts
False acceptance and false rejection are not abstract statistical concepts. They are financial and reputational risks that affect every customer deliverable released based on measurement data.
The true cost of poor calibration appears as:
For organizations that rely on measurement to release product, calibration quality is inseparable from business performance.
At Richard J. Bagan, Inc., calibration is treated as a risk management function focused on reducing PFA and PFR—because every customer deliverable depends on reliable, risk-informed measurement decisions.
We pride ourselves on our premier customer service, which has allowed us to maintain relationships with customers since the beginning. Many of our customers range from Fortune 500 companies to privately owned specialty companies across the U.S.A and other countries. Our proprietary Management Information and Reporting System, BaganTrack gives you direct access to your customer service representative, certificates, master gauge list, and more. Additionally, BaganTrack is compliant to ISO 9001:2015. It is our goal to give you the best experience possible as your calibration and technical service provider.