iSixSigma

4 sigma

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  • #38214

    Waldemar Martinez
    Member

    A company operating at four sigma would spend approximately what percentage of sales as cost of poor quality?
    a.      15 
    b.      3.4            
    c.       0.34      
    d.      8.5                       
    e.       20
     
    Can you tell me how to come out with the answer. explaine please.

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    #114109

    Dennis
    Participant

    According to a Black Belt class sponsored by ASQ I attended a little over 2 years ago, there was a slide that showed 4 sigma to be approximately equal to a cost of poor quality of 15-20% of sales.  The source listed for that was Journal for Quality and Participation, Strategy and Planning Analysis.  How specifically it was calculated, I don’t know.  The table listed estimates for COPQ for sigma values from 1-6.

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    #114110

    Karlos
    Participant

    The 4 sigma is 99.3790% or 6,210 D/M or  0.621 D/H
    .621/4 sigma = .155*100= 15.525 or 15%
     

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    #114118

    e
    Participant

    Karlos,
    Interesting.  Why the .621/4                ?

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    #114126

    Issa
    Participant

    My friend, you might have to review the chapter on process capabilities.
    Let me give you a hint.
    The process capability  is nothing but the ratio of the specified spread to the process spread, in this case:  

    But for this case, we are interested in the tails of the curve outside the specified limits (process incapability, if you wish). And we have already determined that that spread is equal to 0.621, so all we need to do is divide it by the process spread which is .
    I hope that this will help.Issa  

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    #114127

    Teacher
    Member

    Mr. Martinez, I am your teacher and happened to notice you posting one of your test questions on this site.  You are busted!!  The idea is for you to do your own work.  I will be deducting points from this exam as a  result of your actions.

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    #114128

    Issa
    Participant

    Let me get the mess off the way first.
    My friend, you might have to review the chapter on process capabilities.
    Let me give you a hint.
    The process capability Cp is nothing but the ratio of the specified spread to the process spread, in this case:
     
    Cp = (USL – LSL)/ 4 sigma
     
    But for this case, we are interested in the tails of the curve outside the specified limits (process incapability, if you wish). And we have already determined that that spread is equal to 0.621, so all we need to do is divide it by the process spread which is 4 sigma.
    I hope that this will help.
    Issa 
     

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    #114149

    Dale
    Participant

    Does this mean we need to add an ethics section to the GB / BB exams?

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    #114158

    fmea
    Participant

    Teacher:
    Looks like you found a ‘failure mode’Good detective work

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    #114161

    Wally
    Member

    Sigma Level | D/M Cost of Quality

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    #114162

    Wally
    Member

    Sigma Level | D/M Cost of Quality
    2

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    #114163

    Wally
    Member

    Sigma level         D/M              Cost of Quality
    2                    308, 537            not applicable
    3                      66,807             25 – 40% of sales
    4                       6,210              15 – 25% of sales
    5                         233               5-   15% of sales

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    #114223

    Bob J
    Participant

    Hi Wally,
    Nice summary….  Would you mind citing your source(s)?
    Best Regards,
    Bob J

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    #114224

    Bob J
    Participant

    Wally,
    Never mind…. 
    Mike cited a good reference in another related thread…. https://www.isixsigma.com/forum/showmessage.asp?messageID=63228
    thanks anyway….
    Best Regards,
    Bob J

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    #114228

    Wally
    Member

    It came from the Breakthrough management strategy by Mikel Harry and Richard Schroeder

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    #114229

    Bob J
    Participant

    Wally,
    Thanks!  Much appreciated!
    Best Regards,
    Bob J

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    #114231

    Mikel
    Member

    So the real question is what was their source? One of the two of them is known for not having data.
     

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