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Gnoma [55]
3 years ago
14

C&A’s potato chip filling process has a lower specification limit of 9.5 oz. and an upper specification limit of 10.5 oz. Th

e standard deviation is 0.3 oz. and the mean is 10 oz. What is the process capability index for the chip filling process?
Business
1 answer:
abruzzese [7]3 years ago
5 0

Answer:

The process capability index of the chip filling process is 0.56

Explanation:

In this question, we are asked to calculate the process capability index for the chip filing process.

To calculate this, we employ a mathematical approach.

Mathematically;

The process capability index = (upper specification limit- lower specification limit)/ 6σ

Where σ refers to the standard deviation.

From the question, we identify the following;

Upper specification limit = 10.5 oz

Lower specification limit = 9.5 oz

Standard deviation σ = 0.3

Substituting these in the equation, we have;

(10.5-9.5)/6(0.3) = 1/1.8 = 0.56

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Incremental income from further processing   $534,900  

The company should process further

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<em>A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.  </em>

<em>Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .  </em>

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Revenue after split-off point

(104×5400) + (53× 11,100)                                                   1,149,900

Revenue at the slit of  point                  

(25,000× $15)                                                                    <u>   (375,000 )</u>

Additional income from further processing                        774,900

Further processing cost                                                     <u> (240,000)</u>

Incremental income from further processing                    <u> 534,900</u>  

Incremental income from further processing                   $534,900  

The company should process further

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