MKS Inc, Produces Meter Sticks That Have a Target Length of of 100

question 87

Multiple Choice

MKS Inc., produces meter sticks that have a target length of 100 centimeters with upper and lower specification limits of 100.05 and 99.95 centimeters respectively. They are considering the purchase of a new machine that can hold a process output average exactly to target with a standard deviation of 0.02. Which would their process capability index be if they splurged and purchased the new machine?

• A) 0.44
• B) 0.83
• C) 1.26
• D) 1.78

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Definitions:

Treasury Stock

Shares that were once in circulation and have been bought back by the issuing company, reducing the amount of outstanding stock.

Significant Noncash Transactions

Financial activities that do not involve cash flows but significantly affect the financial position of a company.

Treasury Stock Acquisition

The purchase of a company's own shares from the marketplace, reducing the amount of outstanding stock.

Bond Issuance

The process of selling bonds to investors in order to raise capital.