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Exam ICBB topic 1 question 55 discussion

Actual exam question from Six Sigma's ICBB
Question #: 55
Topic #: 1
[All ICBB Questions]

A Belt working in a supply chain environment has to make a decision to change suppliers of critical raw materials for a new product upgrade. The purchasing manager is depending on the Belts effort requiring that the average cost of an internal critical raw material component be less than or equal to $3,800 in order to stay within budget. Using a sample of 38 first article components, a Mean of the new product upgrade price of $3,680, and a Standard Deviation of $120 was estimated. In order to increase the Long Term Z value to 5, what is the maximum long term variation in pricing the Belt can accept for his upgraded critical raw material component?

  • A. $6
  • B. $12
  • C. $24
  • D. $48
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Suggested Answer: C 🗳️


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3 months, 2 weeks ago
Selected Answer: C
The observed standard deviation is +-$120, in other words if we look at the positive side the first-sigma-level will have the value of $3680 + $120 = $3800. This shows that our current process is working at 1 sigma/standard deviation level. The belt needs the process to work at a 5-sigma level instead of 1-sigma. If we multiply the current standard deviation of $120 by 5 (sigma level), we will get a value of $600, which is way over the acceptable average cost of $3800 ($3680 + 600 = $4,280). The question is asking the maximum standard deviation per sigma level that this process needs to work at to have a process under control at 5-sigma. To solve the question, we first need to get the difference between the expected average value and the observed average value, which is $3800 - $3680 = $120. Now, we need to divide this difference of $120 with 5 (expected sigma level) to find out the maximum standard deviation per sigma level, which gives us $120 / 5 = $24.
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1 year, 7 months ago
Reaarange the formula. sigma=x- population mean/z
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Community vote distribution
A (35%)
C (25%)
B (20%)
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