Setup Time for a Product Is 12 Hours

question 19

Multiple Choice

Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time by 1 hour.Setup labor is $20 per hour.If the company wants to reduce non-value-added costs by 40 percent next year, the currently attainable standard for setup time would be

• A) 7.6 hours.
• B) 7.2 hours.
• C) 6.6 hours.
• D) 4.8 hours.

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Definitions:

Coefficient of Determination

A measure in statistics that shows the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

SSE

Sum of Squared Errors; a measure of the discrepancy between the data and an estimation model.

Regression Coefficients

Quantitative measures that assess the relationship between the dependent variable and each independent variable in regression analysis.

Null Hypothesis

A hypothesis that states there is no statistical significance between two variables and any observed difference is due to chance.