Final_Review_Questions_and_Solutions_S_08 - ATECH ATech...

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1 A TECH ATech company produces a video-game controller. They employ a sampling procedure where they sample 100 controllers every day. The following table is the sample data: Sample Sample Size Number of Defective Controllers 100 10 2 14 3 12 4 5 6 8 7 9 11 15 13 17 18 16 19 22 20
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2 The manager wants to use the first 10 days’ data to create the benchmark of the production process. (a) (2+2 points) What is the mean and the sigma of the process? (b) (2 points) Use 3 sigma control limit: what are the lower control limit and upper control limits? (c) (6 points) Draw (or review) the control chart for days 11 through 20. Are there any days when the sample and the chart indicates that the process may be out of control? Why? (You may select one day or a range of days as the basis for your answer. The two reasons must be unique.) (d) (3 points) Suppose the product design (or customer) tolerance interval ranges from 0.10 ± 0.06. What process mean and process variance should they aim for if they want a Six-Sigma Process Capability? B ULLDOG B AKING The Bulldog Baking Company constantly monitors its inventory of flour and determines its order quantity by means of the EOQ formula. Bulldog incurs a fixed cost of $45.00 when ordering. It estimates its holding cost from its cost of capital (20% per annum) and the purchase cost of flour ($0.45 per pound). Bulldog demands 100,000 pounds of flour per year. What is the economic order quantity? How much does Bulldog spend annually on (a) fixed ordering F ANCY P ANS Peggy McConnel is the chief buyer for housewares at a large department store. The chief buyer’s role in such an operations is critical, and Ms. McConnel is currently agonizing over the loss of market share in housewares that her store has suffered because of competition from specialty retailers that carry imported cooking and dining articles. To meet this competitive challenge, Ms. McConnel has reorganized her housewares department to create a “store within a store” that has the same ambiance as her competitors, and she is planning to designate September as “International Dining Month.” The promotion will feature a sale on five special articles, including a copper omelette pan from France. The imported sale items must be ordered six months in advance, and they will not become part of the store’s regular product line. Any items left at the end of September will be sold to a discount chain at a reduced price. In addition, store policy requires that if the store runs out of a special sale item, a more expensive item from the regular line of merchandise will be substituted at the sale price. To help her decide how many of the five promotional item to order, Ms. McConnel has made some early pricing decisions, has gathered cost data, and is pressing her staff for sales forecast information. It has been decided that the French omelette pan will sell for $35, and cost data are given below for this pan and the regular pan that will substitute in the event of shortage.
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Final_Review_Questions_and_Solutions_S_08 - ATECH ATech...

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