The Statistical Definition of Six Sigma Allows for 3

question 119

Multiple Choice

The statistical definition of Six Sigma allows for 3.4 defects per million. This is achieved by a Cpk index of

• A) 0
• B) 1
• C) 1.33
• D) 1.67
• E) 2

Understand the importance and application of profitability ratios such as Return on Assets (ROA) and Return on Equity (ROE).

Calculate and analyze short-term liquidity ratios like the current ratio and the interval measure.

Interpret efficiency ratios including total asset turnover, inventory turnover, and receivables turnover.

Identify and calculate leverage ratios such as times interest earned, total debt ratio, and debt-equity ratio.

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Definitions:

Absolute Advantage

The capability of an individual, company, or country to produce a good or service at a lower cost per unit than competitors.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity, leading to more efficient trade and production.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than others.

Opportunity Costs

The cost of forgoing the next best alternative when choosing among multiple options, measuring the trade-off involved in any decision.