The desired target quality characteristic of a product of Hanson Component Manufacturing is 0.5.The customer-service manager knows that customers are likely to complain when the specification is off the desired quality characteristic by more than 0.025.On average it costs the firm $2,000 to handle and resolve each complaint.The production manager of the Hanson Manufacturing suggests that the company test the product more thoroughly before shipping.The cost of additional testing and adjustments is estimated at $30 per unit.Assume that based on the company's cost information,tolerance is set at 0.0009.What should the target specification ("target specs")for the product be?
A)0.025 +/- 0.0300
B)0.025 +/- 0.0090
C)0.500 +/- 0.0300
D)0.500 +/- 0.0009
E)0.500 +/- 0.00000081

Question

Quizplus · Accepted Answer

The desired target quality characteristic is 0.5 and the tolerance is set at 0.0009. Therefore, the acceptable range is 0.5 +/- 0.0009. Since the customer complains when the product is off by more than 0.025, we also need to ensure that the acceptable range is within +/- 0.025. 
So, the target specification should be 0.5 +/- 0.025, which is equal to 0.5 +/- 0.0009. Therefore, the answer is D.

The Desired Target Quality Characteristic of a Product of Hanson