The Upper and Lower Control Limits for a Component Are

question 119

Multiple Choice

The upper and lower control limits for a component are 0.150 cm. and 0.120 cm., with a process target of .135 cm. The process standard deviation is 0.004 cm. and the process average is 0.138 cm. What is the process capability index?

• A) 1.00
• B) 1.25
• C) 1.50
• D) 1.75

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Definitions:

Book Value

is the net value of a company's assets found on its balance sheet, subtracting liabilities from the total value of assets.

Resell

The act of selling something that one has purchased to another buyer, often for a price higher than the original purchase price.

Equipment Cost

Equipment cost refers to the purchase price and associated expenses of acquiring equipment for business operations, including delivery and installation fees.

Depreciation Tax Shield

The reduction in taxable income that results from the allowance for depreciation expenses, lowering tax liability.