Question

A bank branch receives 300 mortgage applications per business day. At the end of the day, the report showed that these mortgage application contained 50 defects. Each mortgage application contains 14 key fields (defect opportunities) per application. Calculate DPMO. (round to nearest 2 decimal points)

Answer 1

DPMO = 3,571,428.57

Step-by-step explanation:

To calculate the Defects Per Million Opportunities (DPMO), we need to use the following formula:

DPMO = (Number of Defects / (Number of Opportunities per Unit)) * 1,000,000

In this case, the number of defects is 50, and each mortgage application contains 14 key fields (defect opportunities). Therefore, the number of opportunities per unit is 14.

Plugging these values into the formula, we get:

DPMO = (50 / 14) * 1,000,000

DPMO = 3,571,428.57