52 Scenario Analysis Computer Chips A manufacturer of comput

5-2 Scenario Analysis: Computer Chips

A manufacturer of computer chips has a computer hardware company as its largest customer. The computer hardware company requires all of its chips to meet specifications of 1.2 cm. The vice-president of manufacturing, concerned about a possible loss of sales, assigns his production manager the task of ensuring that chips are produced to meet the specification of 1.2 cm.

Based on the production run from last month, a 95% confidence interval was computed for the mean length of a computer chip resulting in:
95% confidence interval: (0.9 cm, 1.1 cm)

What are the elements that the production manager should consider in determining his company’s ability to produce chips that meet specifications?

Do the chips produced meet the desired specifications?

What reasons should the production manager provide to the vice-president to justify that the production team is meeting specifications?

How will this decision impact the chip manufacturer’s sales and net profit?

Solution

Hello there!

Ok, let\'s see:

What are the elements that the production manager should consider in determining his company’s ability to produce chips that meet specifications?

For the items to consider are, to begin with, the raw material of your product, it should be quality to avoid errors in measurements (eg, the plastic is not modified in size with heat, cold, etc. ). After that the accuracy of their machines, should make accurate calculations to the extent that the buyer wants to be within the confidence interval.

Do the chips produced meet the desired specifications?

Currently it not, as far as the buyer wants is not within the confidence interval calculated by the factory manager. A perfect confidence interval would be for example, (1.0, 1.3) cm. This is to ensure that the pieces are a perfect fit.

What reasons should the production manager provide to the vice-president to justify that the production team is meeting specifications?

It must first review its production material, tools and mechanisms of production, so that when making statistical calculations show the vice president of the production company that meets the requirements of its customers.

How will this decision impact the chip manufacturer’s sales and net profit?

It affects the purchase of materials (plastic, metal, etc.) as well as in manufacturing equipment. It might be necessary to draw the attention being employees or even their dismissal.

Greetings!