Suppose That a Firm Has Historically Been Achieving "Three Sigma

question 118

Multiple Choice

Suppose that a firm has historically been achieving "Three Sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "Six Sigma" quality, which of the following phenomena will result?

• A) The average number of defects will be cut in half.
• B) The specification limits will be moved twice as far from the mean.
• C) The average number of defects will be cut by 99.9997%.
• D) The average number of defects will be cut by 99.87%.
• E) The average number of defects will be cut by 99.73%.

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Definitions:

Price Increase

An adjustment made to the selling price of goods or services, often due to factors such as inflation, increased costs of production, or improvements in quality.

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased as a proportion of its previous value.

Unit Sales

The quantity of items sold by a company, not taking into account the revenue from these sales.

Traceable Fixed Expense

A fixed expense that can be directly associated with a specific business segment or product.