📊 GMAT Exam Prep

Source 1: A recent audit revealed that 15% of manufactured units have defects. This rate is higher than the industry average of 10%. The defect types are categorized as cosmetic (Type A), functional (Type B), and critical (Type C). Source 2: Defect Distribution (Past Month) Type A: 60% Type B: 30% Type C: 10% Based on the provided information, if the manufacturing company wants to reduce its overall defect rate most effectively in the short term, which area should it prioritize for improvement?

A Minimizing critical defects (Type C) due to their severity.
B Reducing cosmetic defects (Type A) as they constitute the largest proportion of current defects.
C Improving raw material quality, as it likely impacts all defect types equally.
D Benchmarking against the industry average to identify best practices.

✓ Correct Answer: Option B

To reduce the overall defect rate most effectively in the short term, the company should target the largest component of defects. Cosmetic defects (Type A) account for 60% of all defects. Addressing this category offers the greatest potential for immediate reduction in the total defect rate.

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