The specifications on an electronic component in a target-acquisition system are that its life must be between 12264h and 18396h. The manufacturer realizes a price of $37 per unit produced. However, defective units will be returned with a $9 penalt cost per unit (the manufacturer pays the price plus $9 back for each defective unit). The manufacturer has two alternative production lines both have normally distributed life hours. Mean and standard deviation hours are given in the table below. Process 1 has a production cost of $ 0.15/unit. Production costs for process 2 are twice those for Process 1. (Hours) Process 1 Process 2 Mean 15330 16863 Standard Deviation 3066 1533 Questions: a. What should be the criteria in the evaluation of alternative production processes according to the given data? Answer: (type only one of the option number (1 or 2 or 3 or 4) to the box) 1. Expected profit per unit 2. Expected cost per unit 3. Expected profit and cost per unit 4. The process with the minimum variance should be selected b. Proportion of defectives (fraction of defectives eg. 0.321) for Process 1 is = C. Proportion of defectives for Process 2 is =

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Estimation

A new framework of data analysis where the new statistical methods are used for interpreting the results and analyzing the data is known as estimation in statistics.