A Supplier Is Producing a Machined Part for the Transmission

question 80

Multiple Choice

A supplier is producing a machined part for the transmission of your vehicle.The upper specification limit is 0.125 cm and the lower specification limit is 0.085.The process standard deviation for the process that makes this part is 0.008 and the process average is 0.105.What conclusion can be drawn from these process capability data?

• A)The process is centered and capable.
• B)The process is not centered and capable.
• C)The process is centered and not capable.
• D)The process is not centered and not capable.

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Definitions:

Discounted Payback

A method in capital budgeting that determines the amount of time needed to recover the initial investment, accounting for the present value.

Payback Method

An approach within capital budgeting that determines how long it takes to regain the initial outlay for an investment.

Mutually Exclusive

This term describes options or decisions that cannot occur simultaneously; choosing one means forgoing the others.

Required Rate

The minimum percentage return that an investment must yield to be considered acceptable. It is essentially another term for the required return on investment, critical for financial planning and analysis.