Question

1. A diagnostic chart used to identify sources of variation, where the number and types of defects are tallied, is referred to as a(n) _______. fishbone diagram X-bar chart Pareto chart process control chart

2. The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4, will sell for $7, and is highly perishable, he expects only to sell between six and nine of them. What is the payoff value for the purchase of seven watermelons when the demand is for six watermelons?

14 18 21 24

3.The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4, will sell for $7, and is highly perishable, he expects only to sell between six and nine of them. Based on a maximax strategy, what alternative is selected?

Order 6 Order 7 Order 8 Order 9

Answer 1

1. A diagnostic chart used to identify sources of variation, where the number and types of defects are tallied, is referred to as a Pareto chart .

2.

Payoff for demand of a watermelon = $7

Payoff for purchase of a watermelon = -$4

Payoff value for the purchase of seven watermelons when the demand is for six watermelons = 6 * 7 - 7 * 4 = 14

3.

Payoff Matrix is,

	Demand 6	Demand 7	Demand 8	Demand 9
Order 6	6 * 7 - 6 * 4 = 18	6 * 7 - 6 * 4 = 18	6 * 7 - 6 * 4 = 18	6 * 7 - 6 * 4 = 18
Order 7	6 * 7 - 7 * 4 = 14	7 * 7 - 7 * 4 = 21	7 * 7 - 7 * 4 = 21	7 * 7 - 7 * 4 = 21
Order 8	6 * 7 - 8 * 4 = 10	7 * 7 - 8 * 4 = 17	8 * 7 - 8 * 4 = 24	8 * 7 - 8 * 4 = 24
Order 9	6 * 7 - 9 * 4 = 6	7 * 7 - 9 * 4 = 13	8 * 7 - 9 * 4 = 20	9 * 7 - 9 * 4 = 27

The maximum payoff for Order 6 alternative is 18.

The maximum payoff for Order 7 alternative is 21

The maximum payoff for Order 8 alternative is 24

The maximum payoff for Order 9 alternative is 27

The maximum of these payoffs is $27 for order 9. So, based on a maximax strategy, Order 9 alternative is selected.