Business Memorandum

You are a line manager in Superior Car Part’s Ellisville manufacturing facility.  The company produces automotive parts, and you have responsibility for the line producing steel shafts for the gearbox manufactured in the Ellisville Plant. The acceptable dimension of the shaft is 2.5±0.05 inches in diameter with the most desirable product having a diameter of exactly 2.5 inches. The current equipment is approaching the end of its useful life and needs to be replaced.  Two vendors are trying to sell your company, Superior Car Parts Incorporated, their machines for the shaft-machining task. You have been asked to assess the machines from each vendor, and to make a recommendation for a machine vendor supported by a justification for your decision. 

You asked both vendors to supply data on the machining accuracy of their machines for the given task.  Both vendors machined 100 shafts, collected data, plotted histograms, fitted the histograms with normal distributions and supplied you with their findings.

Let X= diameter in inches of the gearbox shaft

Abano Machines Inc.: X has a normal distribution with a mean of 2.49 and a standard deviation of 0.030

Li Equipment Corp.: X has a normal distribution with a mean of 2.53 and a standard deviation of 0.015 

You are creating this document for the company’s Chief Operating Officer (Links to an external site.), Lena George, and copying the Chief Financial Officer, (Links to an external site.) Amita Kohli. Documents involved in major financial decisions like this may also be distributed by the addressees to other executives and the corporate board members.