Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 21

A company uses an electronic part. One tool the company uses to monitor the supplier of the part is a supplier scorecard. The number of defects is carefully monitored each quarter, and the results are used to help assess the supplier's performance. Two primary performance metrics are parts per million (PPM) defects and percent PPM improvement. The following measurements and scoring criteria are used:


Data collected on this electronic part over the last quarter indicated 15 defects and 400,000 parts received with the PPM defect rate in the prior quarter equal to 50. Calculate the performance measures and update the scorecard using the latest quarter's results.