Which one of the following sentences is correct and more appropriate? Please let me know.
The configuration-A produces higher error-rate compared with the
The configuration-A produces higher error-rate in comparison with the
The configuration-A produces higher error-rate than [does] the
None of the choices you give is incorrect, and it is hard to say which of them may or may not be appropriate without knowing what the context is.
My own preference is for the first form, but with the preposition “to” instead of “with”. Part of this preposition preference comes from the middle-school essay instruction to “compare and contrast” two characters in a story. The distinction the teachers insisted on was that that you can compare one thing to another only when they are similar and must contrast one with the other when they are different.
My second choice would be the third form. The second form is the least preferred because it is wordiest and has the feel of “official” or bureaucratic writing.
But I’d also like to point out that in normal English usage all of the hyphens you have used in your examples would be considered non-standard. “Error rate” would be hyphenated only if it were used as an adjective, not when used as a noun (as here). Likewise “Configuration A” and “Configuration B” would normally be open compounds rather than hyphenated ones. This is more a matter of style than a rigid rule, but over-use of hyphens is one characteristic commonly seen among non-native writers of English.
Another point is that “Configuration A” is functioning much like a proper noun and would commonly be used without the definite article. So my version of your example would be:
Configuration A produces a higher error rate compared to Configuration B.