DPMO Formula

DPMO Formula (Table of Contents)

• DPMO Formula
• Examples of DPMO Formula (With Excel Template)
• DPMO Formula Calculator

DPMO Formula

DPMO stands for defects per million opportunities. This concept we used to hear in the production and most of the time it is used by manufacturing who involve in the production process. DPMO is one of the useful tools to know the chances for defects during the production process so we can use available resource properly and control the defects happening during the production process. DPMO used to know the number of opportunities to make defects under the production process.

The formula for DPMO –

Examples of DPMO Formula (With Excel Template)

Let’s take an example to understand the calculation of DPMO formula in a better manner.

DPMO Formula – Example #1

A form contains 20 fields of information and only 10 forms are check and sampled and 26 defects found in the sample. Calculate the DPMO.

Solution:

DPMO is calculated using the formula given below

DPMO = Total Number of Defects found in Sample / (Sample Size * Number of Defects Opportunities per Unit in the Sample) * 1000000

• DPMO = 26 / (10 * 20) * 1000000
• DPMO = 130000

Above calculation, we can clearly see that there are chances of 130000 defects per million opportunities.

DPMO Formula – Example #2

Voltas Company is in the business of air conditioner so every month they used to manufacture air conditioner as per demand in the market. So they manufacture 50 air conditioners, but they only take out 40 air conditioner for evaluation and they found there is some defect in some of the air conditioner when they pass on this air conditioner to research and development department, in the evaluation they found there are 70 defects. Calculate the DPMO.

Solution:

DPMO is calculated using the formula given below

DPMO = Total Number of Defects found in Sample / (Sample Size * Number of Defects Opportunities per Unit in the Sample) * 1000000

• DPMO = 70 / (40 * 50) * 1000000
• DPMO = 35000

DPMO Formula – Example #3

Company A is in the business of manufacturing and they have their own research and development center for quality evaluation. They manufacture mobile parts and provide parts to many mobile companies. Every week they manufacture 100 and only take out 80 for evaluation purpose and at the time of evaluation, they find 156 defects in products, Calculate DPMO.

Solution:

DPMO is calculated using the formula given below

DPMO = Total Number of Defects found in Sample / (Sample Size * Number of Defects Opportunities per Unit in the Sample) * 1000000

• DPMO = 156 / (80 * 100) * 1000000
• DPMO = 19500

DPMO Formula – Example #4

Tata Sponge is in the business of iron and provides finished iron to the steel company. And they manufacture 520 iron rods and provide to the research and development department only 500 rods for evaluation and research and development department found that there are 635 defects in the iron rod. Calculate the DPMO.

Solution:

DPMO is calculated using the formula given below

DPMO = Total Number of Defects found in Sample / (Sample Size * Number of Defects Opportunities per Unit in the Sample) * 1000000

• DPMO = 635 / (500 * 520) * 1000000
• DPMO = 2442.308

Explanation

DPMO = Total number of defects found in sample/ Total number of defects opportunity in the sample * 100000

So DPMO Stands for defects per million opportunities. DPMO is one of the quality parameter used by many organizations and manufacturing company for better use of available so they can provide better services. With this parameter, we can find out the chances or opportunity for any defects. So the total number of a sample is taken into consideration in this formula and that figure divided by the total number of defects opportunity in the sample and it is multiplied by 1000000. So with the use of one of the six sigma tool, we can find out the chances of defects in the product and we try to rectify it by using all resources properly.

Relevance and Uses of DPMO Formula

DPMO we used to hear in the economics and operation and it is having relevance in the era of today’s world because it helps you to know the defects per million opportunities. So it helps the many manufacturers and evaluates to know the chances for defects per million. DPMO is one of the six sigma matric which used by many manufacturing and many companies to check the quality. DPMO can be used by any organization to check quality because the quality is a major concern in each and every aspect, so it is very necessary to provide proper and high quality to a customer so that customer has to be loyal towards the product of a company. For the purpose of quality check, there is a tool called six sigma. In six sigma there is six tool which used by companies for quality check, but here we are talking about the DPMO which one of the most important six sigma tools, In DPMO we can find defects per million opportunities in the production process. Due to DPMO we can identify the defects and take corrective major to avoid this type of defects during the production process.

DPMO Formula Calculator

You can use the following DPMO Calculator

Recommended Articles

This has been a guide to DPMO formula. Here we discuss how to calculate DPMO along with practical examples. We also provide a DPMO calculator with downloadable excel template. You may also look at the following articles to learn more –

1. Formula for Sales Revenue
2. Guide to Financial Leverage Formula
3. Calculation of Current Assets Formula
4. How to Calculate Owner’s Equity?