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GAQM CLSSBB-001 Exam - Topic 8 Question 88 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 $4,200 in order to stay within budget. Using a sample of 35 first article components, a Mean of the new product upgrade price of $4,060, and a Standard Deviation of $98 was estimated. In order to increase the Long Term Z value to 4, what is the maximum long term variation in pricing the Belt can accept for his upgraded critical raw material component?
B) $35
A) $20
C) $70
D) $110

GAQM CLSSBB-001 Exam - Topic 8 Question 88 Discussion

Actual exam question for GAQM's CLSSBB-001 exam
Question #: 88
Topic #: 8
[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 $4,200 in order to stay within budget. Using a sample of 35 first article components, a Mean of the new product upgrade price of $4,060, and a Standard Deviation of $98 was estimated. In order to increase the Long Term Z value to 4, 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: B

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Marva
4 days ago
I remember something about Z-scores and how they relate to standard deviations, but I'm not entirely sure how to calculate the maximum variation here.
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