You are interested in buying a share of stock in LMU Company. You expect a dividend payment of $10 next year and that the divide
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Answer:
Answer is explained in the explanation section below.
Explanation:
Data Given:
LSL = 4.96 cm
USL = 5.04 cm
Mean = 5 cm
SD = 0.01 cm
1. Capability Index:
Cpk = min ( ,
)
So, now, we need to find the following:
=
=
= 1.33
Similarly,
=
=
= 1.33
So,
Cpk = min ( ,
) = 1.33
2. Maximum Standard deviation allowed.
Let SD be maximum standard deviation allowed.
So,
Mean - 3SD = 4.96 Equation 1
Mean + 3SD = 5.04 Equation 2
Subtracting Equation 2 from 1, we have
6SD = 5.04 - 4.96
6SD = 0.08
SD = 0.0133