# Regression Between Defect Rate and Per Unit \$ Value

Six Sigma – iSixSigma Forums General Forums Tools & Templates Regression Between Defect Rate and Per Unit \$ Value

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• #56085

qazi
Participant

Hi Members,

I am trying to conduct analysis between a forecast defect rate and TCQ/Unit cost.
Can we conduct regression analysis between the above two.
Usually \$ values are never used in regression.
Looking forward to thoughts from the forum.

rgds
Sam

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#203005

Robert Butler
Participant

Yes you can. There are no restrictions on the distributions of the X’s or the Y’s in a regression analysis. As for “never” using dollar values in a regression equation – how would you propose to identify an optimum combination of ingredients for, say a plastic compound, such that the dollar cost per pound was minimized other than using the X’s to predict the final dollar cost. In short – perhaps someone has told you this is never done but whomever offered that opinion is wrong.

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#203016

Mike Carnell
Participant

@rbutler Robert “whomever offered that opinion is wrong.” Very nice. You are always to tactful (generally). Had to smile when I saw this one.

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#203035

Chris Seider
Participant

usually \$ values not used in regression? ….why not

anyways, I would expect COQ to have at least be part of a multiple regression with parts or \$ since the basic COQ would involve them in the calculation. Of course, maybe the COQ could be “recorded wrong” or have bad assumptions.

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#203037

Hemanth
Guest

Technically speaking, you can use any parameter in regression, dollar value is no exception. However, the question is how useful is the \$ value when you run the regression for processes.
Remember, \$ value is a derived parameter based on consumption and unit rate. Hence, its always useful to apply some caution with \$ figures as they can get confounded.

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