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You're working with the Integrated Aircraft Systems (IAS) at Boeing and have been tasked to determine the hidden cost of defective parts, the DPMO and the current Sigma operating level of IAS. You have collected the following data:- (round to whole number)
1- Daily Production 5500 parts (average price of each part $800.00 per part)
2- Current Yield 95%
3- Variable Costs $4,400,000 (variable costs includes cost of any defective parts)
a. Calculate the hidden cost of the defective parts
b. Calculate the DPMO for the daily production.
c. Determine the Sigma level of operation.
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