The manager of an administrative group supporting the sales department of a manufacturing company was concerned about

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The manager of an administrative group supporting the sales department of a manufacturing company was concerned about the large number of notes of credit that were sent to customers to correct errors in invoices. A preliminary investigation was done to determine the major sources of the errors. A source of data was a database that was historically kept by the administrative group on every shipment of product. The database contained information on customers, type of product, price, size of shipment, and the like.

Also, an entry was made if a letter of credit were needed to correct the invoice.

The group identified four factors relating to a shipment of product and defined two levels for each factor:

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The group then set up a 24-1 pattern to use to sample the database. For each of the eight cells in the pattern, 100 entries in the database were randomly selected, and the percentage of notes of credit for the invoices was recorded. The results of the sampling are contained in the following table:

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Analyze the data to determine major factors causing the notes of credit.

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Quality Improvement Through Planned Experimentation 3/E

ISBN: 978-0071759663

3rd Edition

Authors: Ronald Moen ,Thomas W Nolan ,Lloyd P Provost

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