4. PPM (Parts per million) is a measurement used by many customers to measure quality performance. Definition: One PPM means one (defect or event) in a million or 1/1,000,000 In the past a good supplier would have a defect rate of less than 1%, (10,000 PPM). However, production and quality control procedures have improved and expectation was increased to 0.1% or 1,000 PPM. Now the rate for most components is targeted at 25 PPM or 0.0025% a. If 12,500 components are delivered and 2 are found to be defective, calculate the PPM: b. If 15,000 components are delivered and 15 are found to be defective, calculate the PPM: 5. EOQ: Economic Order Quantity is the replenishment quantity that minimizes the combined inventory carrying costs and ordering costs. Calculate the EOQ for the following: Annual Demand Volume Unit value at Cost Inventory Carrying Cost% Ordering Cost EOC Problem 1 88,000 units $79.50 25% annually $50 per order Problem 2 6,500 units $3.25 15% annually $35 per order