LESSON 1: Severity of losses from miss-measurement

Before 1968, wire/cable measureing machines were resulting in losses of 0.5m - 1.0m fro 100m measured, or 0.5% - 1.0%. The total sales of electric wires/cables in Japan, for example, in 1991 was 2.2 trillion yen, or US$20 billion(based on figures from the Economic Planning Agency). this would mean that if the miss-measurement was even 0.5%, the loss in 1991 would have been about US$100 milion. A 1.0% error would have meant US$200 million lost.

[ Quiz ]
How much would be saved if losses were 0.1% based on total sales in 1991 ?

a. 2.2 billion yen(US$26.4 million)*
b. 220 million yen(US$2.64 million)*
* Based on exchange rate of 1 yen/US$0.012.