Points for parts per million (PPM) defect rate will be allocated on a company\'s
ID: 1157885 • Letter: P
Question
Points for parts per million (PPM) defect rate will be allocated on a company's supplier scorecard as follows: PPM Defect Rate Scorecard Points 1-20 21-40 41-60 61-80 81-100 20 19 18 17 16 15 14 13 12 101-150 151-200 201-250 251-300 301-350 351-400 401-450 451-500 501-550 551-600 10 6 601-700 701-800 801-900 901-1000 3 > 1000 The supply manager is responsible for calculating the performance measures and updating the scorecard with the points earned Here is the information she collected this quarter about a supplier No. of defects: 40 No. of parts received: 50,000 PPM defect rate for the prior quarter 1150 What is the percent PPM improvement?Explanation / Answer
Hello!
To solve this question we need to make the no. of parts received equal in the two quaters.
In the current quarter:
No. of defetcs = 40
No. of parts received = 50,000
In the previous quarter:
No. of defects = 1150
No. of parts received = 1,000,000 (because it's parts per million)
Applying the basic unitary method,
In the current quarter, no. of defects per million parts will be ((1,000,000*40)/50,000) = 800
Therefore, percent PPM improvement = ((1150 - 800)/1150)*100
= 30.4%
Hope you understood!:)