Decidion Analysis Task 3

1098 Words Nov 4th, 2014 5 Pages
Decision Analysis Task3

A. Manufacturing the Samba Sneakers cost-effectively is very important for the organization. The best option for the organization would be to manufacture the sneaker with the lowest cost for every 1,000 sneaker produced

The options to manufacture are:
1. Recondition the existing equipment with fixed cost of $50,000, variable cost of $1000 for every 1,000 sneaker.
2. Buy New Equipment with fixed cost of $200,000, variable cost of $500 for every 1,000 sneaker.
3. Outsource with no fixed cost, with variable cost of $3000 for every 1,000 sneaker.
.

Based on volume output the best option to cost-effectively manufacture the Samba Sneakers would be to buy New Equipment with fixed cost of $200,000, variable
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Based on past data, the current control limit for the organization is 99.73% for this process, with the random selection of 16 soles over a 15 hour period for a size 10. Therefore, in order to improve quality we must set up control limits for sample means using standard deviation. The random selection of 16 soles we must find the overall mean to calculate its control limits.

The average length in the sample size can be determined by adding the lengths and dividing them by the total number of samples 10+10.3+10.2+10.1+10+10+10.2+10+9.9+10+9.8+10+10.8+10.6+9.7/15=10.11

The average mean of the samples size are 10.11

Now that the average mean size has been determined, we must determine the UCL upper control limits and the LCL lower control limits.

The UCL = x+zox= 10.375
The LCL = x-zox=9.625

Based on the UCL of 10.375 and the LCL of 9.625, samples that fall out of the range are consider to be out of control. The current Control Limits for Shoe Sole Height Samples are between 9.625 and 10.375. Some selections within the 15 hour period fall out the upper and lower control limits. The samples are out of control within the hours of 13 and 14. . As a result, the work for hours 13 and 14 should be examined to control limits.

Control charts allow the organization to randomly measure selected shoes to determine if the process are within the organizations control limits. Trends for the Control

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