chapter 8 managing quality learning activity: ensuring quality in the supply chain

File Home Insert Draw Page Layout Formulas Data Review View Help Acrobat Share Comments = Calibri 12 ' === ab Wrap Text X Cut L Copy Format Painter AutoSum D Fill Clear 28 0 Paste BIU A v Merge & Center $ % 98 99 Insert Delete Format Conditional Format as Cell Formatting Table Styles Sensitivity Sort & Find & Filter Select Clipboard Font Alignment Number is Styles Cells Editing Sensitivity G6 x fi A B D E F G H L M N 1 Chapter 8: Managing Quality 2 Learning Activity: Ensuring Quality in the Supply Chain Using the data below, compute your supply chain's Rolled Yield. 3 When you put multiple machines together in a production line, even small errors in each machine can create terrible quality in your finished products. This gets even worse when you consider your hundreds or thousands of suppliers, each who may sell you materials with good quality products, but errors combine and may create too many customer defects. 4 Defective items Defect Rate (%) Yield (%) 5 6 Rolled Yield = Yield1 * Yield2 * Yield3 *.... (where Yield = % quality items) 7 1 35 Quantity Delivered 1,200 1,761 486 2,051 8 2 Receipt Date June 17, 2021 June 27, 2021 June 28, 2021 June 30, 2021 July 9, 2021 July 13, 2021 July 17, 2021 July 18, 2021 Supplier Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 1 Supplier 4 Supplier 6 8 491 7 Rolled Yield = 9 "When a product or service is complex, it is important that suppliers maintain very high 10 levels of quality to ensure that the final product has the required quality. A concept called 11 rolled yield accounts for the cumulative defect rate observed by the final customer. For 12 example, suppose a product or service has 100 components or parts and each part has a 13 yield of 99 percent (1 percent defective). Then the overall yield of the final product is obtained by multiplying the yields of all the individual parts. Since there are 100 parts with the same yield (-99), in this case the rolled yield is.99 x.99.99...*.99 (100 times) = 0.366 = only 36% !!!" (Schroeder and Goldstein, 2021, p. 150) 611 1 1,742 1 236 3 With such good suppliers, does this Rolled Yield pose 14