A Company That Makes Handheld Computers Is Trying to Improve

question 57

Essay

A company that makes handheld computers is trying to improve one of its poorer selling products. They conducted some customer surveys and found that customers prefer the product to weigh between 10 and 14 ounces. At present, the mean of the process is 12 ounces and the standard deviation of the process is 0.4 ounces. They want to ensure that the production process will meet customer expectations; that is, the process capability index (C_p) will be greater than or equal to 1.00.
a.What is the C_p of the current production process?
b.What does the standard deviation of the process have to be for the C_p to equal 1.00?

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Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional stock.

Shares

Ownership stakes in a company or financial asset which entitle the holder to a proportional share of the profits, distributed as dividends, if they are announced.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points around the mean, commonly used to quantify the amount of variation.

Average Rate

The mean value of a set of rates, capturing the central tendency over a specified period or dataset.