You Have Just Used the Capability Index (Cpk) Formulas to Compute

question 58

Multiple Choice

You have just used the capability index (Cpk) formulas to compute the two values "min [1.5, 1]." Which of the following is the interpretation of these numbers?

• A)The true capability index value is 1.
• B)The mean of the production process has shifted to the left of the design limits.
• C)The mean of the production process has shifted to the right of the design limits.
• D)The mean has not shifted at all.
• E)The true capability index value is between 1.5 and 1.

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Definitions:

Marginal Cost Function

A mathematical expression that describes how the cost of producing one additional unit of a good or service varies with the quantity produced.

Reservation Price

The maximum amount a consumer is willing to pay for a good or service.

Elasticity of Demand

An index that determines the sensitivity of consumer demand for a product to its price change, by comparing the percent change in the amount of the good demanded with the percent change in its price.

Business Users

Individuals or entities that use goods or services for the purpose of running a business, as opposed to personal or recreational use.