A manufacturer of computer chips has a computer hardware company as its largest

Question

A manufacturer of computer chips has a computer hardware company as its largest customer. The computer hardware company requires all of its chips to meet specifications of 1.2 cm. The vice-president of manufacturing, concerned about a possible loss of sales, assigns his production manager the task of ensuring that chips are produced to meet the specification of 1.2 cm.

Based on the production run from last month, a 95% confidence interval was computed for the mean length of a computer chip resulting in:
95% confidence interval: (0.9 cm, 1.1 cm)

What are the elements that the production manager should consider in determining his company’s ability to produce chips that meet specifications?

Do the chips produced meet the desired specifications?

What reasons should the production manager provide to the vice-president to justify that the production team is meeting specifications?

How will this decision impact the chip manufacturer’s sales and net profit?

Provide detailed explanation for each question.

Explanation / Answer

The elements would include

1)

Quality of production given by the confidence interval, quality testing, etc

Quantity/Capacity of the production viz a viz the demand

2)

Since confidence interval does not contain the specification of 1.2, it is clear that the process if out of control.

3.

As such there are no reasons but they may try to sell the product to different customer so that there is no direct loss. Simultaneously, they would need to change the production quality.

4.

Initially they may have to bear some losses and sales will decrease. But if quality is not compromised, it would improve in due course.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.