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EK Chemical Company sells a specialty chemical in packages marked 100 grams. In reality, EK has set the process mean at 100.5 grams, and the process currently has a standard deviation of 0.50 grams. Suppose the customer will accept anywhere from 98 to 102 grams as long as the average package has 100 grams.
A) Calculate the process capability index for the current manufacturing process. Is the process capable of meeting the tolerance limits more than 99.7% of the time? Explain.
B) Now suppose EK re-centers the manufacturing process so that the mean is exactly 100 grams while the standard deviation remains the same. Calculate the process capability ratio. Is the process still capable of meeting the tolerance limits more than 99.7% of the time?
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he software manager estimates a value completed of $279,000. Determine the schedule variance, cost variance, SPI, CPI, and time variance for the project.
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Under which production range is each process appropriate? Which process is best for this contract? Does your decision change if the per unit variable cost for DM increase to $21?
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