In: Operations Management
The accounts receivable department has documented the following problems over a 30-day period:
Category |
Frequency |
Invoice not on record (not found) |
24 |
No formal invoice issued |
18 |
Check (payment) not received on time |
30 |
Check not signed |
8 |
Invoice number and invoice referenced do not agree |
12 |
Invoice amount does not agree with the check amount |
108 |
Note: Decimals should be rounded to four (4) decimal places; percentages should be rounded to one (1) decimal place.
Create the chart in Excel,
b. What is the most typical defect?
c. As a percentage, how typical is this defect?
d. Based on your Pareto chart, prioritize the quality improvements in decreasing order of importance.
(a)
Category | Frequency | Relative fr. | Cumulative fr. |
Invoice amount does not agree with the check amount | 108 | 0.54 | 0.54 |
Check (payment) not received on time | 30 | 0.15 | 0.69 |
Invoice not on record (not found) | 24 | 0.12 | 0.81 |
No formal invoice issued | 18 | 0.09 | 0.90 |
Invoice number and invoice referenced do not agree | 12 | 0.06 | 0.96 |
Check not signed | 8 | 0.04 | 1 |
Total | 200 | 1 |
(b)
The most typical defect is "Invoice amount does not agree with the check amount"
(c)
In relative frequency terms, it is 0.54 or 54% in percentage terms.
(d)
The decreasing order of importance: