5-2 Scenario Analysis: Computer Chips
1.
The elements that the production manager should consider in determining the manufacturer's ability to produce chips that meet specifications are the sample mean length of the computer chips and the sample standard deviation.
2.
The desired length for the computer chip is 1.2 cm, and that measurement falls outside of the 95% confidence interval computed. On average, last month's production length did not meet the company's requirements.
3.
The 95% confidence level was not met in specifications. The reason the production manager should provide to the vice president to justify that the production team is meeting specifications is that the 95% confidence interval provided does not represent the
actual mean length of the computer chip. As the confidence interval increases, the width of the interval should also increase. If a 99% confidence level was performed instead of 95%, the interval would have been, ( 0.8 cm to 1.3 cm), which might contain a target mean of 1.2 cm.
4.
If the specified requirement for the length of 1.2 cm for the computer chip isn't met, the manufacturer would risk losing its largest customer. This could ultimately cause the manufacturer to go out of business, losing profits.
