Quadratic loss function, Managerial Accounting

Consider the following quality data for three different manufacturers of automobile weather-strips:

Weather-strip Bulb Dimension

Specification y=20 +or- 4mm

 

supplier

mean

variance

Cp

Cpk

%Defects

$Defects

Warranty Cost ($)

I

20.0

(4/3)2

1.0

1.0

0.270

 

 

II

18.0

(2/3)2

2.0

1.0

0.135

 

 

III

17.2

(2/5)2

3.33

1.0

0.135

 

 

Assume a customer loss per defective unit of $1450; cost of the weather-strip is $150, and a customer specified functional tolerance of ?0 = ± 5mm.  Assume the annual production rate is 200,000 units.

1. Confirm the entries in the %Defects column.

2. Calculate the $Defects for each supplier, and fill in the table.

3. Using a quadratic loss function of the form:

Average Loss = k [ s2 + ( mean - target )2

calculate the $ loss due to variation, and fill in the table.

4. What is the sigma level for each supplier?

5. What is the value of manufacturing specifications to customers?

6. Select the best supplier, and explain your choice.

Posted Date: 3/11/2013 3:54:36 AM | Location : United States







Related Discussions:- Quadratic loss function, Assignment Help, Ask Question on Quadratic loss function, Get Answer, Expert's Help, Quadratic loss function Discussions

Write discussion on Quadratic loss function
Your posts are moderated
Related Questions
Ask queThe standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticip

Assumption of break even analysis The break even analysis is based upon the following assumptions : 1) All elements of cost, i.e., production , administration and selling di



Susan works in a real estate office that is equipped with up-to-date copiers, scanners, and printers. She is frequently the only employee working in the office in the evenings and


#queComputing equivalents units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in (30 -45min) Sue Electronics makes

Determine the Internal factors of pricing decision 1) Organization factor: pricing decision occur on two level in the organization. Overall price strategy is dealt with by to

The Pinewood Furniture Company Pty Ltd plans to design two lines of chairs in the coming year-lounge and patio. The company is considering introducing an activity-based costing sys

Can someone do my case study for managerial accounting including writing a sales report?