A manufacturer of computer chips has a computer hardware com

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).

Give your answers and explain in depth

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

2. Do the chips produced meet the desired specifications?

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

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

Solution

specification of chip = 1.2 cm

95% confidence level = (0.9 cm, 1.1cm)

1) Quality of raw materials, labour time required, inspection, and awareness of labourers about the required specifications

2) No they do not.

Since sample mean is only average of 0.9 and 1.1 = 1 cm

very less than 1.2 cm

3) He cannot justify but can find methods or suggestions to improve to meetthe specification

4) By meeting specification, customer confidence, sales and reputation of the company increase thus by increased sales, profits would increase.