Answered: Round all intermediate numbers to four…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Round all intermediate numbers to four decimal places. The final answer can be rounded to the nearest dollar.

Consider a normally distributed process that cuts wood with a "process center" of 32 inches and a standard deviation of .20 inches. The lower specification limit is 32.42 inches. A piece of wood that is cut too short must be scrapped at a cost of $15.60. A piece of wood that is cut too long must be re-cut by hand at a cost of $4.00. The firm runs 22,000 pieces of wood through the machine per day and works 360 days per year. What is the annual fixing cost of this process.

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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