Chapter 4, Problem 4.202ACA

Establishing tolerance limits. The tolerance limits for a particular quality characteristic (e.g., length, weight, or strength) of a product are the minimum and/or maximum values at which the product will operate properly. Tolerance limits are set by the engineering design function of the manufacturing operation (Total Quality Management, Vol. 11, 2000). The tensile strength of a particular metal part can be characterized as being normally distributed with a mean of 25 pounds and a standard deviation of 2 pounds. The upper and lower tolerance limits for the part are 30 pounds and 21 pounds, respectively. A part that falls within the tolerance limits results in a profit of $10. A part that falls below the lower tolerance limit costs the company $2; a part that falls above the upper tolerance limit costs the company $1. Find the company's expected profit per metal part produced.