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GAQM CLSSBB-001 Exam - Topic 6 Question 85 Discussion

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 Belt's 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?
C) $24
A) $6
B) $12
D) $48

GAQM CLSSBB-001 Exam - Topic 6 Question 85 Discussion

Actual exam question for GAQM's CLSSBB-001 exam
Question #: 85
Topic #: 6
[All CLSSBB-001 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 Belt's 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?

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Suggested Answer: C

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Ashanti
4 days ago
I think the max variation should be $12. Seems reasonable!
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Alaine
10 days ago
The average cost is $3,680, so we need to keep it under $3,800.
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Skye
15 days ago
I feel like I should be able to figure this out, but I can't recall the exact formula for determining the maximum variation. Is it based on the standard deviation?
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Cordelia
20 days ago
I think the Z value of 5 is really high, which might mean we can only accept a very small variation. But I'm not clear on how to calculate that.
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Thora
25 days ago
This feels similar to a practice question we did on supplier cost analysis. I think we need to calculate the acceptable variation based on the Z value.
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Eliseo
2 months ago
I remember something about Z-scores and how they relate to standard deviations, but I'm not sure how to apply it here.
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