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F. Naz, B.Com

Category: Multiple Problems

Satisfied Customers: 5279

Experience: have completed B.Com and CA Finalist

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Meena Company has been producing computer chips with an

Customer Question

Meena Company has been producing computer chips with an average life of 290 hours and a standard deviation () of 24 hours. The customer specifications are 300 + or – 100 hours for the upper and lower specification limits respectively. a) Meena has the opportunity to obtain a large order from XYZ Computers if it can produce the computer chips with specification limits of 300 + or – 100 hours. If the minimum acceptable process capability is 1.33 (a 4-sigma process), can Meena meet the customer’s specification requirements at this time? If it cannot, explain if it is due to a drifting of the mean or too much variability. Explain. Now suppose that Meena has introduced some changes in its operations. The customer has also agreed to use Meena if Meena can provide a process capability of 1.33 or greater. After the first 20 days of production under the new process, it finds that the average life is 295 hours but it has not determined the standard deviation. What is the maximum acceptable value of the standard deviation (σ) for Meena to be selected? The customer’s spec limits are still 300 + or – 100 hours. Suppose that Meena is producing computer chips with a σ = 24 hours and it cannot improve on this. Using the process capability index, what are the upper and lower limits for the mean of the process so that Meena can meet the customer requirements at a process capability of 4-sigma limits? Interpret your results. A hardware store orders snow blowers during the summer for delivery in the fall. Each snow blower costs the store $400 and if sold prior to or during the winter sells for a full price of $550. The store’s manager doesn’t want to carry any unsold snow blowers in inventory from one year to the next, so he reduces the price to $350 in the spring in order to get rid of any leftovers. He will be able to sell all of these at this price. Based on past experience, the store’s manager expects that the demand for snow blowers at full price will be between 6 and 8. The store manager estimates the probabilities of selling different numbers of snow blowers at full price to be the following: probability of 6 is 0.40, the probability of 7 is 0.35 and the probability of 8 is 0.25. Draw the decision tree that the hardware store manager can use to analyze this problem. Using an expected value approach, how many snow blowers should the hardware store manager order to maximize its profit? Suppose the hardware store manager wants an expected profit of $1200.00 if he buys 8 snow blowers. Assuming everything else remains the same, what should the full price for the snow blowers be for the expected profit to be $1200.00? The full price is the price prior to or during the winter season. Assume that the probabilities, etc. do not change with this price change The Security National Bank is considering two locations for a new branch. The two choices are a major mall and a strip mall. The site selection team is evaluating two sites, and they have scored the critical success factors for each as shown below. They have identified both the relocation cost and the monthly projected profit. The weights reflect the same relative importance as we have used in class. They want to use these ratings to compare the locations. Critical Success Factor Factor Weight Major Mall Site Strip mall Site Relocation cost 0.30 $190,000 $270,000 Monthly profit 0.30 $50,000 $75,000 Customer service 0.20 2.4 2.1 Service quality 0.10 1.8 2.4 Security and safety 0.05 2.4 1.8 Market share 0.05 1.8 2.1 The non-economic scores are on a 0 to 3.0 basis with 3.0 being best and it is possible to achieve the 3.0 score. Using the factor scoring (rating) method as we learned in class, which site should Security National Bank use based on the above information? Joe Austin is opening a laundry and dry cleaning store in northern Wisconsin. He is going to operate the store 250 days per year. Joe is considering a couple of options for the machine that he will use to press the shirts. One press (Press A) will cost $12,100 and with this press he estimates that it will cost $0.323 to press a shirt. The second press (Press B) he is considering will cost $15,400 to purchase and it will cost $0.244 to press a shirt. Regardless of the press he purchases, he will charge a customer $1.10 per shirt. Joe will continue to operate 250 days per year. For the following analyses, Joe will ignore taxes and depreciation. He wants to recover the cost of the press he buys during the first year. Joe assumes that the demand will be slow starting during the initial start-up that will last only a couple of months. Over what range of shirts per year would each of the presses be preferred over the other press? Show your work. Considering only Press B, Joe now wonders how many shirts per year he would need to press if he wants to recover the cost of Press B during the first year and he