Which of the Following Statements Is True of Six Sigma

question 94

Multiple Choice

Which of the following statements is true of Six Sigma?

• A) It is a statistically based philosophy to reduce defects and boost productivity.
• B) At Six Sigma, a production process will have 6.6 defects per million units.
• C) At Six Sigma, a production process would be 100 percent accurate.
• D) A company can achieve Six Sigma perfection by reducing the number of defects to one in six thousand.

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Definitions:

Capital Budgeting Technique

Methods used by companies to evaluate and select investments in long-term assets based on their potential to generate cash flows in the future.

Profitability Index

A financial metric used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment.

Payback Period

The duration required for an investment to generate cash flows sufficient to recover its initial cost.

AAR

Average Annual Return, which measures the average return generated by an investment per year over a specified period.