A Major Customer for a Vendor of Plastic Containers Requires

question 17

Multiple Choice

A major customer for a vendor of plastic containers requires that its containers
Have a volume of 10,000 cubic inches with a tolerance of 50 cubic inches. To ensure that
Its process is under control and meeting its major customer's specifications, the vendor
Uses control charting. Forty subgroups of five containers each were selected periodically
From the production process. The average of the means across all subgroups was found
To be 10,012 cubic inches and the average range was 48 cubic inches. The lower and
Upper control limits for the R chart are

• A) 0 and 111.65 cubic inches
• B) 9984.30 and 10,039.70 cubic inches
• C) 9910.53 and 10,113.47 cubic inches
• D) 0 and 101.47 cubic inches
• E) 0 to 98 cubic inches

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Definitions:

Present Value

The valuation of an expected income stream determined by discounting the future income to the present using a discount rate.

Income Stream

A regular flow of money from an investment, property, or other financial assets.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing or the real yield on savings.

Perfect Substitute

Two or more goods that can be used interchangeably with no loss of utility by the consumer.