Quadratic loss function, Managerial Accounting

Assignment Help:

Consider the following quality data for three different manufacturers of automobile weather-strips:

Weather-strip Bulb Dimension

Specification y=20 +or- 4mm

 

supplier

mean

variance

Cp

Cpk

%Defects

$Defects

Warranty Cost ($)

I

20.0

(4/3)2

1.0

1.0

0.270

 

 

II

18.0

(2/3)2

2.0

1.0

0.135

 

 

III

17.2

(2/5)2

3.33

1.0

0.135

 

 

Assume a customer loss per defective unit of $1450; cost of the weather-strip is $150, and a customer specified functional tolerance of ?0 = ± 5mm.  Assume the annual production rate is 200,000 units.

1. Confirm the entries in the %Defects column.

2. Calculate the $Defects for each supplier, and fill in the table.

3. Using a quadratic loss function of the form:

Average Loss = k [ s2 + ( mean - target )2

calculate the $ loss due to variation, and fill in the table.

4. What is the sigma level for each supplier?

5. What is the value of manufacturing specifications to customers?

6. Select the best supplier, and explain your choice.


Related Discussions:- Quadratic loss function

How much to order, How much to order Supposing the estimated annual usa...

How much to order Supposing the estimated annual usage of a component by Machinery Ltd is 20,000 units.  Usage is even throughout the year and only one order per annum is place

Managerial accounting, Gafat Engineering Ethio plc manufactures two types o...

Gafat Engineering Ethio plc manufactures two types of TV sets LCD and CRT both having only one model. The LCD and CRT television sets sell for $9000 and $5000, respectively. the co

Moral Law vs. Tax Law, 1. Do you think that the tax minimization scheme ...

1. Do you think that the tax minimization scheme described to Debbie Kishimoto is in harmony with the ethical behavior that should be displayed by top corpo- rate executives? Wh

State the debtors turnover ratio, Debtors turnover ratio( or receivables tu...

Debtors turnover ratio( or receivables turnover ratio) Meaning: this ratio establishes a relation ship between net credit sales and averages trade debtors.   Objective

Planning, Planning, Directing, and Controlling A clever sign hanging on...

Planning, Directing, and Controlling A clever sign hanging on the wall of a business establishment: "The Managers are paid to manage the work-- If There Were No Problems we wou

Cost concept, Cost concept . techniques of costing . absorption costing

Cost concept . techniques of costing . absorption costing

Assignment, What is the fastest time financial accounting assignment can be...

What is the fastest time financial accounting assignment can be done by your company? It will be a report type format but overview type without going into depth.

The value chain and cost analysis, The Value Chain and Cost Analysis The ...

The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me

Case study, yolande tzar came to norethen ireland

yolande tzar came to norethen ireland

Accounting for business enterprise, a)      Calculate  and  discuss  the ...

a)      Calculate  and  discuss  the  nature  and  role  of accounting  for  business enterprise.  b)      Determine and discuss  the desirable qualities  expected from the prep

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd