3. Process Capability (7 marks) The retailer has a reputation for continually lowering the retail prices of their products for consumers. Correspondingly, they expect their suppliers and logistic providers to continually improve their operations efficiency to support such price cuts for consumers. To accomplish this, the retailer specifies ever increasing performance targets for their suppliers and logistic providers in their contractual agreements. ABC has just received a draft of their contract extension with the retailer which specifies a "time in system" minimum that will be effective July 1st, 2019. The specification is that 95% of packages must have a "time in system" of 30 minutes or less. If ABC fails to meet this specification (evaluated on surprise audits), they will have to pay significant financial penalties to the retailer. This will reduce their chances of winning future contracts from the retailer. In preparation for adhering to the new contractual specification, ABC has researched various improvement alternatives (all with similar costs), including running software simulations to obtain statistical data on how each alternative would perform (see below). Process Description Mean "Time in "Time in System" Standard Deviation System" 26 Current Continue as-is 4 Alternative #1 More loading/ 25 unloading staff Improved bar-code Alternative #2 22 5 readers Alternative #3 Faster conveyor 23 system 3 Alternative # 2 unloading staff Improved bar-code readers 22 Alternative # 3 23 Faster conveyor system a. Prepare a chart that shows how effectively each process would address the new specifications (5 marks) Note: Add columns to the above table to calculate z-values, probability, and to comment on the capability. Show all calculations to receive full marks. b. Management would like to know which of the alternatives you recommend, if any, they undertake considering the new specifications. Evaluate feasible alternatives and justify a single recommendation. (2 marks) 3. Process Capability (7 marks) The retailer has a reputation for continually lowering the retail prices of their products for consumers. Correspondingly, they expect their suppliers and logistic providers to continually improve their operations efficiency to support such price cuts for consumers. To accomplish this, the retailer specifies ever increasing performance targets for their suppliers and logistic providers in their contractual agreements. ABC has just received a draft of their contract extension with the retailer which specifies a "time in system" minimum that will be effective July 1st, 2019. The specification is that 95% of packages must have a "time in system" of 30 minutes or less. If ABC fails to meet this specification (evaluated on surprise audits), they will have to pay significant financial penalties to the retailer. This will reduce their chances of winning future contracts from the retailer. In preparation for adhering to the new contractual specification, ABC has researched various improvement alternatives (all with similar costs), including running software simulations to obtain statistical data on how each alternative would perform (see below). Process Description Mean "Time in "Time in System" Standard Deviation System" 26 Current Continue as-is 4 Alternative #1 More loading/ 25 unloading staff Improved bar-code Alternative #2 22 5 readers Alternative #3 Faster conveyor 23 system 3 Alternative # 2 unloading staff Improved bar-code readers 22 Alternative # 3 23 Faster conveyor system a. Prepare a chart that shows how effectively each process would address the new specifications (5 marks) Note: Add columns to the above table to calculate z-values, probability, and to comment on the capability. Show all calculations to receive full marks. b. Management would like to know which of the alternatives you recommend, if any, they undertake considering the new specifications. Evaluate feasible alternatives and justify a single recommendation. (2 marks)