For Exercise 4.109, see page 220; for 4.110, see page 223; for 4.111 to 4.114, see page 228; for 4.115, see page 230; and for 4.116 to 4.118, see page 235.

Question 4.118

4.118 Managing new-product development process.

Exercise 4.113 (page 228) gives the distributions of , the number of weeks to complete the development of product specifications, and , the number of weeks to complete the design of the manufacturing process. You did some useful variance calculations in Exercise 4.115 (page 230). The cost per week for developing product specifications is $8000, while the cost per week for designing the manufacturing process is $30,000.

  1. Calculate the standard deviation of the cost for each of the two activities using Rule 1 for variances (page 231).
  2. Assuming the activity times are independent, calculate the standard deviation for the total cost of both activities combined.
  3. Assuming , calculate the standard deviation for the total cost of both activities combined.
  4. Assuming , calculate the standard deviation for the total cost of both activities combined. How does this compare with your result in part (b)? In part (c)?
  5. Assuming , calculate the standard deviation for the total cost of both activities combined. How does this compare with your result in part (b)? In part (c)? In part (d)?