Doug Hole makes shovels using recycled materials. Every hour 10 shovels are inspected and tested for quality. Twelve batches were sampled and the number in each group had at least one defect is as follows: 0, 2, 1, 0, 0, 1, 3, 0, 1, 2, 2, 0. Required:

a Develop upper and lower control limits (99.7%) for the proportion of shovels with defects. (6 marks)

b Mount Dangerous Bikes wants to implement a balanced scorecard. Its mission statement reads, We build high-quality, reliable bikes at competitive prices. The entitys competitive strategy is to continuously improve the functionality, reliability and quality of its bikes while holding prices at levels similar to competitors. The entity operates three sub-units organised around the product lines for the three types of mountain bikes it currently produces. Mount Dangerous Bikes sells directly to bike shops and operates an internet site that allows bike shops to place orders for customised products.

Describe two of the four perspectives of the balanced scorecard, and list two performance objectives for each of the two perspectives you have chosen that are likely to be important for Mount Dangerous Bikes. (6 marks)

c. How do organisations create and maintain competitive advantages? (3 marks)