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:

Risk Of Loss

The potential for an investment, asset, or transaction to result in a financial loss rather than a gain.

F.O.B. Ocean City

Free on Board Ocean City, a shipping term indicating that the seller is responsible for goods and their cost of transport until they are loaded aboard a vessel at Ocean City.

Destination Contract

A type of contract specifying that the seller is responsible for the goods until they are delivered to a specific destination or address as indicated in the contract.

Shipment Contract

A legal agreement where the seller is obligated to send the goods to a specific destination, with the risk of loss passing to the buyer upon delivery to the carrier.