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

Variables, Variables Unrestricted variable Yi can be expressed in terms...

Variables Unrestricted variable Yi can be expressed in terms of two non-negative variables by using the substitution: Yi = Yi' - Yi'', Yi', Yi'' ≥ 0 The substitution

Explain functional classification of ratios, Explain Functional classificat...

Explain Functional classification a)  Liquidity ratio: these are the ratio which measures the short term solvency or financial position of a firm. These ratios are calculati

Predetermined Overhead, SSI, a meat/burger/chicken processing manufacturing...

SSI, a meat/burger/chicken processing manufacturing plant loacted in Idaho, USA prepares

Evaluate average duration of the production run, A manufacturing  company ...

A manufacturing  company  needs  2500 units  of a particular component every  year. The  company buys  it at the rate of Rs. 30 per  unit.  The order processing cost for this part

HELP , ) Allgood Inc. has fixed costs of $480,000. It has a unit selling pr...

) Allgood Inc. has fixed costs of $480,000. It has a unit selling price of $6, unit variable cost of $4.50, and a target net income of $1,500,000. HOW TO COMPUTE

Managerial accounting, I need help with a solution in the Cornerstones of F...

I need help with a solution in the Cornerstones of Financial and Managerial Accounting textbook, Chapter 11, problem 11-51B on page 578. I need to create a statement of cash flows

The more competitive bid, Hornsby Manufacturing has four categories of ove...

Hornsby Manufacturing has four categories of overheads. The four categories and the expected overhead costs for each category for next year are as follows:   Maintenance  $140,000

Example of cash discount, M/s ABC's present credit terms are 1/10 net 30 th...

M/s ABC's present credit terms are 1/10 net 30 that they are planning to change to 2/10 net 30.  The current average collection period is 20 days and the variable cost to sales rat

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