A Company That Makes Handheld Computers Is Trying to Improve

question 30

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 .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:

Operating Cash Flow

The cash generated from the normal operations of a business, reflecting how much cash is produced by the business's core operations.

Depreciation Expense

The distribution of a physical asset's cost over its expected lifespan for tax and accounting reasons.

Net Working Capital

The gap between a firm's existing assets and its short-term obligations, showcasing its liquidity and ability to run efficiently in the near term.

Accounts Payable

The amount of money owed by a business to its suppliers or creditors for goods and services bought on credit.