What Is the Purpose of a Process Capability Study

question 53

Multiple Choice

What is the purpose of a process capability study?

• A) To determine how the quality of the company's products compares to the quality of its competitors' products
• B) To provide information about variation in the company's production processes
• C) To determine how much value various work activities add for customers
• D) To determine if work teams will improve quality
• E) To determine whether the causes of product failures are internal or external

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Definitions:

Lockbox System

A service provided by banks to companies for the collection of payments from customers, involving the use of a special post office box.

Cash Conversion

The process by which a company turns its inventory or other current assets into cash, often measured through cycles or time periods.

Usable Cash

The portion of cash balances that is readily available for business operations or other immediate use, excluding reserved or allocated funds.

Target Cash Balance

The desired cash balance that a firm plans to maintain in order to conduct business.