In the Equation Cp = (Upper Specification - Lower Specification)/total

question 23

Multiple Choice

In the equation Cp = (upper specification - lower specification) /total variation, what does Cp denote?

• A) capacity variation index
• B) capability pattern
• C) process capability index
• D) capability push

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Definitions:

Profitability Index

Profitability Index is a financial metric that calculates the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Benefit-Cost Perspective

A method of evaluating projects or decisions by comparing the benefits they will generate to the costs required to implement them.

NPV

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.

Present Value

The today's worth of a future sum or cash flows series, based on a predetermined rate of return.