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A Machine Shop Needs the Diameter of the Castings It

question 48

Essay

A machine shop needs the diameter of the castings it purchases between 1.000 inch and 1.060 inches to insure that the surface finish will be acceptable.A large sample of castings found the mean diameter was 1.025 inches with a standard deviation of 0.008 inches.Calculate the process capability index.


Definitions:

Material Purchase Price Variance

A reiteration, focusing on the deviation between the actual amount paid for material and the standard cost.

Standard Price

The predetermined cost assigned to materials, labor, and overhead for the purpose of budgeting and cost control.

Actual Purchase Price

The specific cost paid for goods or services at the time of purchase, as opposed to the budgeted or standard cost.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with the level of production, such as utilities or materials used in the production process.

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