Sigma Corp Manufactures Widgets

question 42

Essay

Sigma Corp manufactures widgets.It has discovered a design defect that creates a risk that one or more widgets may cause property damage.Briefly explain how the company could manage that risk by shifting it.Identify a potential cost of shifting the risk.

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Definitions:

Bad Lots

Refers to batches of goods or products that do not meet the quality standards set by the manufacturer or industry.

Good Lots

In quality control, this term refers to batches of products that meet the specified quality standards.

Control Limits

are statistical boundaries set in process control charts that signal when a process may be out of control and corrective action may be needed.

X-bar

A symbol representing the sample mean or average in statistical analyses.