A defective item contains one or more defects. However, not all items with defects are defective. It depends on the severity of the defect. New cars may have several defects, some of which may not even be noticed by the customer. However, if the car contains a defect that is measured and reported, the car (or part of the car) may be considered defective.
Consider the loan application process. In this case, the processing department is the customer. You want to know how many defects they see. Your form has 36 entries. You sample 50 forms to estimate the defect rate. One application has 7 incorrect entries—there are 7 defects present on this form. Another application has 4 incorrect entries—there are 4 defects present on this form.
Overall, 18 forms have at least one defect, so 18 forms are defective out of 50. Overall, there were 62 total defects per 1800 opportunities (36 opportunities per form * 50 forms).
