EBK OPERATIONS MANAGEMENT
14th Edition
ISBN: 9781260718447
Author: Stevenson
Publisher: MCG COURSE
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Chapter 10, Problem 25P
Summary Introduction
To determine: The firm which is capable.
Introduction:
Process capability index is the measure of the capacity of a process which is the measure of ability of the process to produce the required output within specified limits.
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As part of an insurance company’s training program, participants learn how to conduct an analysis of clients’ insurability. The goal is to have participants achieve a time in the range of 30 to 45 minutes. Test results for three participants were the following: Armand, a mean of 36.0 minutes and a standard deviation of 3.0 minutes; Jerry, a mean of 34.0 minutes and a standard deviation of 2.0 minutes; and Melissa, a mean of 37.5 minutes and a standard deviation of 1.7 minutes.
a.Compute process capability for the participants and determine whether each is capable. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Melissa ? Cp what is it
As part of an insurance company’s training program, participants learn how to conduct an analysis of clients’ insurability. The goal is to have participants achieve a time in the range of 30 to 45 minutes. Test results for three participants were the following: Armand, a mean of 36.0 minutes and a standard deviation of 2.0 minutes; Jerry, a mean of 37.0 minutes and a standard deviation of 2.0 minutes; and Melissa, a mean of 37.5 minutes and a standard deviation of 2.6 minutes. a.Compute process capability for the participants and determine whether each is capable, given 4-sigma quality standards. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
An automobile manufacturer plans to spend one billion dollars to improve the quality of a new model. The manufacturer expects the quality improvement program to eliminate the need for recall and reduce the costs for warranty repairs. The manufacturer’s experience has been, on average, 1.5 recalls for each new model at a cost of $300 per vehicle per recall.
The average cost per recall, if one is needed, is expected to increase by 10% for the new model. Costs for other warranty repairs are expected to decrease from $200 to $80 per unit. Sales of the new model were expected to be 500,000 units without the quality-improvement program. The firm believes that the proposed, well-advertised quality program expected to cost an additional $50 million will increase total sales to 650,000 units. The gross profit per unit on the new model sold is $5,000.
Required:
Would you recommend the proposed quality-improvement program? Please show all your computations to support your answer.
Chapter 10 Solutions
EBK OPERATIONS MANAGEMENT
Ch. 10.2 - Prob. 1.1RQCh. 10.2 - Prob. 1.2RQCh. 10.4 - Prob. 1.1RQCh. 10.4 - Prob. 1.2RQCh. 10 - Prob. 1DRQCh. 10 - Prob. 2DRQCh. 10 - Prob. 3DRQCh. 10 - Prob. 4DRQCh. 10 - Prob. 5DRQCh. 10 - Prob. 6DRQ
Ch. 10 - Prob. 7DRQCh. 10 - Prob. 8DRQCh. 10 - Prob. 9DRQCh. 10 - Prob. 10DRQCh. 10 - Prob. 11DRQCh. 10 - Prob. 12DRQCh. 10 - Prob. 13DRQCh. 10 - Prob. 14DRQCh. 10 - Prob. 15DRQCh. 10 - Prob. 16DRQCh. 10 - Prob. 1TSCh. 10 - Prob. 2TSCh. 10 - Prob. 3TSCh. 10 - Prob. 1CTECh. 10 - Prob. 2CTECh. 10 - Prob. 3CTECh. 10 - Prob. 4CTECh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - A production process consists of a three-step...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 1.1CQCh. 10 - Prob. 2.1CQCh. 10 - Prob. 2.2CQCh. 10 - Prob. 2.3CQCh. 10 - Prob. 2.4CQ
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