Exam Review Problems

Exam Review Problems (Process Capability and Breakeven Only): SEE ALSO THE REVIEW SHEET – NOTE: OTHER TYPES OF PROBLEMS WILL APPEAR AS WELL. THIS IS A SAMPLING OF WHAT TO EXPECT.

 The ABC Company produces steel tubes. The steel tube process is a stable cut-to-length operation that generates tubes that have a mean of 12.00 inches and standard deviation of 0.10 inches.

The XYZ Company wishes to buy tubes from the ABC Company. The XYZ Company requires steel tubes between 11.77 inches and 12.23 inches in length.

 What is the Cp and what does it mean for the steel tube process?

 What proportion of steel tubes can be expected to meet XYZ’s specifications?

 If XYZ requires a 1.00 Cp from its suppliers, what does ABC need to do?

 The costs from Le Bistro, a French-style deli, are shown below. Fixed costs are $3500 per month. Annual Forecasted Item Price Cost Unit Sales Sandwich $2.95 $1.25 7,000 units Soft drink 0.80 0.30 7,000 units Homemade chips 0.59 0.18 1,000 units Baked potato w/topping 1.55 0.47 5,000 units Tea 0.75 0.25 5,000 units Breakfast burrito 2.95 1.20 2,000 units Crepe 1.75 0.55 2,500 units Milkshake 1.75 0.80 2,000 units Salad Bar 2.85 1.00 3,000 units

How many units of food would need to be sold in order to break even?

How many milkshakes would need to be sold, given current product mix, if the firm is to make 100,000 profit?