An item is defective when it doesn't perform within a predefined set of specifications. Defect rate is generally applied to business products but can also be used to asses procedures and services. To calculate defect rate, divide the number of defective units by the total amount of units tested.
The formula for defect rate is the amount of defective products observed divided by the number of units tested. For example, if 10 out of 200 tested units are defective, the defect rate is 10 divided by 200, or 5 percent. Defect rate is often stated in terms of defects per million. Defects per million reflects how many units out of 1 million would be defective. To calculate defects per million, multiply the defect rate by one million. For example, the defects per million for a 5 percent defect rate is 50,000.