Suppose That You Have Calculated the Control Limits for a P-Chart

question 48

Multiple Choice

Suppose that you have calculated the control limits for a p-chart to be the following:
LCL = 0.02 and UCL = 0.08.
Today, you took 10 samples of 20 units each. The first nine samples each had one defect. The last sample had zero defects. What can you conclude?

• A) the process is out of control
• B) the process is in a state of control
• C) the last sample should be ignored because it was "too good"
• D) you calculated the limits incorrectly because the LCL must be either negative or 0
• E) the sample size must be increased

Understand the philosophy and tools of Total Quality Management (TQM).

Identify key figures and their contributions to quality improvement, such as Deming.

Recognize and apply the PDCA cycle in continuous improvement processes.

Differentiate between various TQM tools and their applications in problem-solving.

---

Definitions:

Direct Quote

A representation of the exchange rate between two currencies, stating how much of the home currency is required to buy one unit of the foreign currency.

Forward Exchange Rate

The price agreed upon for a currency transaction that will occur at a future date, used to hedge against currency risk.

Premium

An amount paid in addition to the standard or nominal amount, often for insurance, superior products, or securities above their face value.

Spot Rate

The current market price at which a particular asset, such as foreign currency, can be bought or sold for immediate delivery.