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We spoke about Six-Sigma in our class and learned that allows managers to measure critical issues by use of a common metric we now know as DPMO, or defects per million opportunities. If the bicycle company above, TripleSpoke, had a requirement within its business to ensure that all custom bicycle orders were processed within 25 days of receipt of order, this metric would be considered, in Six-Sigma terms, to be a critical customer requirement (CCR).
TripleSpoke received 1,000 custom bike orders last month. Of those 1,000 orders there were 135 orders that were not delivered on time within the 25-day window. From this data, determine the DPMO for this TripleSpoke CCR.
The use of a new predictor
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If = 8,000 per month, = $45 per order, and = $2 per unit per month, find the economic order quantity?
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