MM 305 Unit 9 Project Problems

3. Precision Manufacturing has a government contract to produce stainless steel rods for use in military aircraft. Each rod is required to be 20 millimeters in diameter. Each hour, random samples of size n = 4 rods are measured to check process control. Five hours of observations yielded the following:

Diameter

Time Rod 1 Rod 2 Rod 3 Rod 4

9 A.M. 19.8 20.4 19.9 20.3

10 A.M. 20.1 20.2 19.9 19.8

11 A.M. 19.9 20.5 20.3 20.1

Noon 19.7 19.8 20.3 20.2

1 P.M. 19.7 20.1 19.9 19.9

1. Construct the xbar-chart and the R-chart.

2. Is the process in control?

4. Modern Electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the components. Modern Electronics is considering building a new facility but the estimated profits would be impacted by the type ofMARKET that develops. The probability for a strongMARKET is 0.3; for a fair MARKET is 0.5; and for a poor MARKET is 0.2. You are responsible for advising the president of Modern Electronics on the type facility that should be built or to not build a facility at all. The table shows the estimated profits under each market and for each size facility.

Estimated Profits

Strong Market Fair Market Poor Market

Build a large facility 550,000 110,000 -310,000

Build a medium-size facility 300,000 129,000 -100,000

Build a small facility 200,000 100,000 -32,000

Do not build a facility 0 0 0

1. Provide a recommendation to the president that maximizes profits

2. Provide a second recommendation to the president that minimizes regret.

5. Consulting income at Kaplan Associates for the period February – July is shown in the table below. Assume that the initial forecast for February is $65,000. Use Exponential smoothing to forecast August’s income.

MONTH INCOME ($1,000)

February 70.0

March 68.5

April 64.8

May 71.7

June 71.3

July 72.8

1. Use a smoothing constant of ? = 0.2.

2. Use a smoothing constant of ? = 0.5.

3. Which forecasting constant is best in this situation?

6. Johnson Construction Company is in the process of installing power lines to a large housing development. The company wants to minimize the total length of wire used, which would minimize the company’s cost. The housing development is shown below. Each house has been numbered, and the distances between houses are given in hundreds of feet.

1. What do you recommend to Johnson Construction Company?

8. From the States Data Set the following output for the Income in 2000 and for the Income in 2010 was created.

1. Which variable has the greatest relative variation?

9. You are a consultant working for Kaplan Consulting. The U.S. Department of Labor has requested assistance in evaluating the impact of economic stimulus on the unemployment rate. From the States Data Set the following t test was conducted to answer the question:

“Has there been a significant reduction in the national unemployment rate between January and June?”

1. What is the Null and the Alternative Hypotheses?

2. What is your level of alpha (?)?

3. What is your conclusion?

4. What is your answer to the question?

10. The Governor of a southern state has asked Kaplan Consulting to determine if the state were able to increase the percentage of its population with a Bachelor’s Degree to 50%, what might be the expected median household income based on 2010 data? Here is the output from the Regression procedure from Excel.

1. What would be the predicted median household income if the percentage of the population in the state were 50% or 50?