Computation of C, and C,,, Measures. Your company produces chemicals for use by dry cleaners, and it

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Computation of C, and C,,, Measures.

Your company produces chemicals for use by dry cleaners, and it ships the chemicals in barrels with a specified weight of 500 pounds. Marketing and manufacturing personnel discussed at length the amount of variability a customer would accept in the weight of a barrel, and they decided that so long as each barrel was between 495 and 505 pounds customers would not complain. The standard deviation computed for the barrels shipped last month amounted to three pounds.

a. Compute the C, index for the barrel weight.

b. Assume that for the past month the average weight of barrels shipped has been 498 pounds. Compute the C,, index for the process.

c. Why do the two indexes differ?

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Cost Accounting A Decision Emphasis

ISBN: 9780873939126

4th Edition

Authors: Germain B. Boer, William L. Ferrara, Debra C. Jeter

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