[Efficiency standards) Do Little has been asked to monitor the efficiency and effectiveness of a newly installed machine. The specialized machine has been guaranteed by the manufacturer to package 7,800 engine gaskets per kilowatt hour (kWh). The rate of defects on production is estimated at two percent. The machine is equipped with a device to measure the number of kWhs used. During the first month of use, the machine packaged 1,390,000 gaskets, of which 17,900 were flawed, and it used 175 kWhs.

a. What is the efficiency standard for flawless output?

b. Calculate the achieved efficiency for the first month and briefly comment on it.

C. Determine the achieved effectiveness and briefly comment on it.

d. Assume that the company was charged $3.20 per kWh during the first month this machine was in service. Estimate the company’s savings or loss in power costs because of the machine’s efficiency level in the first month of operations.

e. If you were a customer buying this company’s gaskets for use in auto¬ mobile production, what level of quality control would you want the company to have and why?

 LO.1