Other Things Remaining the Same, and Assuming Thatis Smaller Than

question 15

Multiple Choice

Other things remaining the same, and assuming thatis smaller than USL and larger than LSL, if the standard deviation (σ) of the process decreases, process capability index (Cpk) of the process will
I. Stay the same
II. Will always increase
III. Will always decrease
IV. Will sometimes increase

• A) I
• B) II
• C) III
• D) Either II or III
• E) IV

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted to cash in the upcoming fiscal year.

Days' Sales In Inventory

An indicator that reflects the average number of days a company requires to convert its inventory into sales.

Inventory Ratio

A financial metric that indicates how many times a company's inventory is sold and then replaced over a specific period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in managing stock.