Computer Chips Scenario Analysis
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Industrial Engineering
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Feb 20, 2024
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Running Head: COMPUTER CHIPS SCENARIO ANALYSIS
Computer Chips Scenario Analysis
Ifeoma Ojialor
Southern New Hampshire University
January 7, 2024
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Running Head: COMPUTER CHIPS SCENARIO ANALYSIS
1)
What are the elements that the production manager should consider in determining
his company's ability to produce chips that meet specifications?
The production manager must evaluate various factors when manufacturing materials to
specifications. One crucial consideration is the operational status of production equipment. If
persistent production issues arise, the manager should investigate potential sources, including the
equipment, and make necessary adjustments to meet requirements. Additionally, assessing the
quality of materials used in the production process is imperative to ensure durability aligns with
company specifications. Regarding production equipment, the manager must verify correct
programming using the appropriate confidence interval, necessitating knowledge of the mean
and standard deviation.
2)
Do the chips produced meet the desired specifications?
The computer hardware company mandates that all chips adhere to a specification of 1.2 cm.
However, based on a 95% confidence interval ranging from 0.9 cm to 1.1 cm, the chips
manufactured in the previous month failed to meet the specified criteria.
3)
What reasons should the production manager provide to the vice-president to justify
that the production team is meeting specifications?
While it is evident that the production team is not meeting specifications, there may be
justifications suggesting otherwise. The production manager might assert the presence of a
statistical error leading to inaccurate information. This discrepancy could stem from a small
sample size, potentially causing skewed data. To mitigate sample errors, it is advisable to
increase the sample size, as recommended by Asiret and Sunbul (2016, p. 653).
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Running Head: COMPUTER CHIPS SCENARIO ANALYSIS
4)
How will this decision impact the chip manufacturer's sales and net profit?
Non-compliant chips not only fail to meet specifications but also pose a significant threat to the
company's sales and net profit. Selling chips that deviate from the specified requirements is
improbable, especially given the computer hardware company's strict adherence to a 1.2 cm
standard. Consequently, chips not meeting specifications would likely need to be discarded,
leading to increased costs and reduced profit. While the manufacturer could mitigate this by
incorporating waste costs, it still represents an expense impacting overall profitability.
Continuously producing substandard chips may ultimately jeopardize the entire production
contract, resulting in a complete loss of sales and net profit from manufacturing computer chips
for the computer hardware company.
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Running Head: COMPUTER CHIPS SCENARIO ANALYSIS
References
Asiret, S., & Sunbul, S. (2016). Investigating test equating methods in small samples through
various factors. Educational Sciences: Theory & Practice, 16(2), 647-668.
doi:10.12738/estp.2016.2.2762.