SCENARIO 3-14-B
You Are the Quality Control Manager of a Water

question 113

Short Answer

SCENARIO 3-14-B
You are the quality control manager of a water bottles company. One of the biggest complaints in the
past years has been the breakage and, hence, the concern on the durability of the connector between
the lid and the bottle which many users use as a handle for the bottles. To collect evidence before
implementing any modification to the production process, your department has subjected 100 water
bottles to a durability test and the following data on the number of times the handles have been used
to lift the bottles before they break are contained in the file Scenario3-14-DataB.XLSX. $$\begin{array} { l l l l l l l l l l } 493 & 506 & 515 & 491 & 500 & 505 & 517 & 510 & 506 & 503 \\503 & 491 & 495 & 496 & 496 & 505 & 493 & 486 & 504 & 483 \\514 & 494 & 497 & 501 & 493 & 490 & 510 & 494 & 494 & 495 \\494 & 486 & 495 & 506 & 506 & 507 & 502 & 498 & 510 & 501 \\500 & 505 & 492 & 486 & 501 & 496 & 501 & 521 & 510 & 498\end{array}$$
-Referring to Scenario 3-14-B, the variance of the number of times the handles have been used
to lift the bottles before they break in this sample is ________.

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Definitions:

Present Value

Today's value of future financial sums or cash flow streams, considering a specific rate of return.

Compound Interest

Interest computed on both the original amount of money and on the interest that it has already earned in past periods.

Earnings Rate

The rate at which a company generates income relative to assets, investments, or equity.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.