5 - Chapter 6.pdf The normal curve is used for process capability and percentage out of specification Using a normal curve to estimate scrap and rework is an accurate method to estimate scrap and rework costs. Below is the information provided by a widget manufacturing company. Specifications: 0.5530 +0.0025 Process Average: 0.5535 Standard Deviation: 0.0015 Production Rate: 100,000 per year Rework all undersize parts at a cost of $5.25 each. Scrap all oversize parts at a cost of $15.34 each. 1. Assume the production process average is 0.5535. Use the upper and low specifications to a) Calculate the annual cost for reworked parts. a) b) Calculate the annual cost for scrapped parts b) 2 N 100% b) Calculate the annual cost for scrapped parts. b) c) Total Failure Cost 2. Now assume we fix the process and the average is equal to the specification which is equal to 0.5530. Use the upper and lower specifications to: a) Calculate the annual cost for reworked parts. a) b) Calculate the annual cost for scrapped parts. b) c) Total Failure Cost = d) Reduction in Failure Cost