Smart Home & Consumer IoT Hardware worked example

Supplier Risk with component defect severity of 15 score: a worked example in smart home & consumer iot hardware

Push component defect severity up to 15 score and the picture changes. This example computes every intermediate figure at that operating point. Use it when supplier risk in smart home and consumer iot hardware needs a defensible ranking against other smart home and consumer iot hardware risks for the next review.

The inputs for this scenario

  • Component defect severity (impact on device): 15 score (raised for this scenario; the documented default is 6)
  • Defect occurrence likelihood at supplier: 4 score (unchanged)
  • Incoming-inspection detection ability: 3 score (unchanged)

Working through the calculation

  • Applying the documented formula (Supplier risk score = supplier risk severity score × supplier risk occurrence score × supplier risk detection score) to the inputs above produces each figure below.
  • At this operating point the engine returns 8.15 score for supplier risk score, the number this scenario is built around.
  • At this operating point the engine returns 15 score for supplier risk severity score.
  • At this operating point the engine returns 4 score for supplier risk occurrence score.
  • At this operating point the engine returns 3 score for supplier risk detection score.

How this compares with the baseline

  • Against the tool's baseline example, where component defect severity sits at 6 score and the headline result is 4.55 score, this scenario comes in 79.12% above the baseline at 8.15 score.
  • It multiplies a supplier's defect severity, occurrence, and detection scores into a single Risk Priority Number for that component or vendor. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Supplier risk score: 8.15 score (headline result)
  • Supplier risk severity score: 15 score
  • Supplier risk occurrence score: 4 score
  • Supplier risk detection score: 3 score

Run it with your numbers

  • Every input above is editable in the live Supplier Risk calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.