Over the Last Few Months, Ithaca Precision Instruments (IPI) Obtained

question 6

Multiple Choice

Over the last few months, Ithaca Precision Instruments (IPI) obtained the following measurements on a key quality characteristic of its product: $$\begin{array} { | c | c | } \hline \text { Observed Quality Characteristic } & \text { Probability } \\\hline 0.46 & 0.05 \\\hline 0.47 & 0.10 \\\hline 0.48 & 0.12 \\\hline 0.49 & 0.15 \\\hline 0.50 & 0.30 \\\hline 0.51 & 0.12 \\\hline 0.52 & 0.10 \\\hline 0.53 & 0.05 \\\hline 0.54 & 0.01 \\\hline\end{array}$$ The company's experience has been that a customer will reject a product that deviates from the target quality characteristic of 0.50 by more than 0.004. Each rejection costs the firm an estimated $5.00. Determine the expected total quality loss of the observed quality characteristic for IPI. Round final steps of calculation to 4 decimal places (e.g., $18.89568 becomes $18.8957) .

• A) $7.8125.
• B) $31.2500.
• C) $78.1250.
• D) $108.1250.
• E) $312.5000.

---

Definitions:

Boycotting

The act of refusing to buy, use, or participate as a means of protest or coercion.

Norris-LaGuardia Act

The Norris-LaGuardia Act of 1932 is a U.S. federal law that protects the right of workers to organize and engage in labor activities without employer interference.

Wagner Act

Also known as the National Labor Relations Act of 1935, it established the legal right for workers to participate in unions and collective bargaining in the United States.

Unfair Labor Practice

Actions by employers or unions that violate the rights of employees under labor laws.