Price Quote for Case Study Statistics

Melanie Barber
Chapter 4 Aczel and Sounderpandian (sixth ed)
CAS !" Acceptable Pins
A co#pany supplies pins in bul$ to a custo#er% &he co#pany uses an auto#atic lathe to produce
the pins% 'ue to #any causes( )ibration* te#perature* +ear and tear* and the li$e(the len,ths of
the pins #ade by the #achine are nor#ally distributed +ith a #ean of -%.-/ inches and a
standard de)iation of .%.-0 inch% &he custo#er +ill buy only those pins +ith len,ths in the
inter)al -%.. (1 () .%./ inch% 2n other +ords* the custo#er +ants the len,th to be -%.. inch but
+ill accept up to .%./ inch de)iation on either side% &his .%./ inch is $no+n as the tolerance.
1. What percentage of the pins will be acceptable to the customer?
In order to improve percentage accepted, the production manager and the
engineers discuss adjusting the population mean and standard deviation of
the length of the pins.
2. If the lathe can be adjusted to have the mean of the lengths to any
desired value, what should it be adjusted to? Why?
3. uppose the mean cannot be adjusted, but the standard deviation can
be reduced. What ma!imum value of the standard deviation would
ma"e #$% of the parts acceptable to the consumer? &'ssume the
mean to be 1.$12.(
). *epeat +uestion 3, with #,% and ##% of the pins acceptable.
,. In practice, which one do you thin" is easier to adjust, the mean or the
standard deviation? Why?
-he production manager then considers the costs involved. -he cost of
resetting the machine to adjust the population mean involves the engineers.
time and the cost of production time lost. -he cost of reducing the
population standard deviation involves, in addition to these costs, the cost of
overhauling the machine and reengineering the process.
/. 'ssume it costs 01,$ 12 to decrease the standard deviation by
&!31$$$( inch. 4ind the cost of reducing the standard deviation to the
values found in +uestions 3 and ).
5. 6ow assume that the mean has been adjusted to the best value found
in +uestion 2 at a cost of 07$. 8alculate the reduction in standard
deviation necessary to have #$%, #,%, and ##% of the parts
acceptable. 8alculate the respective costs, as in +uestion /.
7. 9ased on your answers to +uestions / and 5, what are your
recommended mean and standard deviation?