(a) A manufacturing company has been inspecting units of output from a process. Each product inspected is evaluated on five criteria. If the unit does
(a) A manufacturing company has been inspecting units of output from a process. Each product inspected is evaluated on five criteria. If the unit does not meet standards for the criteria, it counts as a defect for the unit. Each unit could have as few as zero defects, and as many as five. After inspecting 2,000 units, they discovered 33 defects. What is the DPMO measure for this process?
(b) Backwoods American, Inc., produces expensive water-repellent, down-lined parkas. The company implemented a total quality-management program in 2005.Following are quality-related accounting data that have been accumulated for the five-year period after the program's start.
Year | |||||
2006 | 2007 | 2008 | 2009 | 2010 | |
Quality Cost (in thousands dollars) | |||||
Prevention cost | 3.2 | 10.7 | 28.3 | 42.6 | 50 |
Appraisal cost | 26.3 | 29.2 | 30.6 | 24.1 | 19.6 |
Int. failure cost | 39.1 | 51.3 | 48.4 | 35.9 | 32.1 |
Ext. failure cost | 118.6 | 110.5 | 105.2 | 91.3 | 65.2 |
Accounting Measure (in thousands dollars) | |||||
Sales costs | 2700.6 | 2690.1 | 2705.3 | 2310.2 | 2880.7 |
Manufacturing cost | 420.9 | 423.4 | 424.7 | 436.1 | 435.5 |
The company wants to assess its quality management program. Based on the given dataset develop quality index numbers using sales and manufacturing cost for the five-year time period.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a DPMO can be computed by using the formula 1000000 Number of Defects Numbe...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
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