The specifications for a manifold gasket that installs between two engine parts calls for a thickness of 2.500 mm ± .020 mm. The standard deviation of the process is estimated to be 0.004 mm
The process is currently operating at a mean thickness of 2.50 mm. (a) What are the upper and lower specification limits for this product? (b) What is the Cp for this process? (c) About what percent of all units of this gasket will meet specifications? Does this meet the technical definition of Six Sigma?
(a) LSL = 2.48 mm, USL = 2.52 mm. (b) Cp = (2.52 - 2.48 )/(6 ? 0.004 ) = 1.67. (b) Each specification limit lies 5 standard deviations from the centerline, so practically 100 percent of units will meet specifications. However, this percentage is not quite as high as Six Sigma would call for.
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Service businesses can be classified as wholesalers and retailers
Indicate whether the statement is true or false
Select the incorrect statement from the following.
A. Actual costs are not relevant in many decisions because actual costs cannot be determined until after the decision has been made. B. Actual costs are useful for evaluating managerial performance. C. When accumulating the cost of a specific cost object, the indirect costs are allocated to the cost object. D. The difference between a direct cost and an indirect cost is that a direct cost relates to a given cost object while an indirect cost does not.
Firms account for leases using either the operating lease method or the capital (finance) lease method. Which of the following is not true?
a. The capital, or finance, lease method treats leases equivalent to installment purchases or sales, where the lessee borrows funds from the lessor to purchase the asset and the lessor recognizes profit at the time of sale. b. The lessee records the leased asset and the lease liability on the balance sheet at the present value of the contractual cash flows at the time of signing the lease. c. The lessee amortizes the leased asset, similar to recognizing depreciation on buildings and equipment. d. The lessor recognizes interest expense on the lease liability, similar to recognizing interest expense on long-term notes or bonds. e. The lessor records the signing of a capital lease the same as if the lessor sold the leased asset for an installment note receivable.
Which of the following methods starts with accrual income and adjusts it for the non-cash items it contains?
a. The indirect method b. The direct method c. Both a and b d. None of the above