(Situation B) a Manufacturing Company Makes Hemostats for Hospital Emergency

question 27

Essay

(Situation B) A manufacturing company makes hemostats for hospital emergency rooms. The company is interested in implementing statistical process control procedures in its production operation. The production manager believes that the proportion of defective hemostats generated by the process is about 3%. The company collected one sample of 300 consecutively manufactured hemostats each day for 20 days. The data are shown below. $$\begin{array} { c c c c c c } \hline \text { Sample } & \text { Sample Size } & \text { Defectives } & \text { Sample } & \text { Sample Size } & \text { Defectives } \\\hline 1 & 300 & 8 & 11 & 300 & 12 \\2 & 300 & 6 & 12 & 300 & 11 \\3 & 300 & 11 & 13 & 300 & 14 \\4 & 300 & 15 & 14 & 300 & 8 \\5 & 300 & 12 & 15 & 300 & 7 \\6 & 300 & 11 & 16 & 300 & 3 \\7 & 300 & 9 & 17 & 300 & 9 \\8 & 300 & 6 & 18 & 300 & 11 \\9 & 300 & 5 & 19 & 300 & 10 \\10 & 300 & 4 & 20 & 300 & 6 \\\hline\end{array}$$
-Find the upper and lower control limits for the p-chart.

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Definitions:

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets, indicating operational efficiency.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's accounts receivable are collected during a certain period, reflecting its efficiency in extending credit and collecting debts.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to honor its debt payments by comparing its interest expense to its operating income.

Operating Cycle

The duration between the purchase of inventory by a business and the receipt of cash from accounts receivable, indicating the speed at which a company turns inventory into cash.