Ch. 6-Case Problem-Go Bananas!
Great Grasslands Grains, Inc. (GGG) manufactures and sells a wide variety of breakfast cereals. GGG’s
product development lab recently created a new cereal that consists of rice flakes and banana-flavored
marshmallows. The company’s marketing research department has tested the new cereal extensively
and has found that consumers are enthusiastic about the cereal when 16-ounce boxes contain at least
1.6 ounces and no more than 2.4 ounces of the banana-flavored marshmallows.
As GGG prepares to begin producing and selling 16-ounce boxes of the new cereal, which it has named
Go Bananas management is concerned about the amount of banana-flavored marshmallows. It wants to
be careful not to include less than 1.6 ounces or more than 2.4 ounces of banana-flavored
marshmallows in each 16-ounce box of Go Bananas. Tina Finkel, VP of Production for GGG, has
suggested that the company measure the weight of banana-flavored marshmallows in a random sample
of 25 boxes of Go Bananas on a weekly basis. Each week, GGG can count the number of boxes out of the
25 boxes in the sample that contain less than 1.6 ounces or more than 2.4 ounces of banana-flavored
marshmallows; if the number of boxes that fail to meet the standard weight of banana-flavored
marshmallows is too high, production will be shut down and inspected.
Ms. Finkel and her staff have designed the production process so that only 8% of all 16-ounce boxes of
Go Bananas fail to meet the standard weight of banana-flavored marsh-mallows (the probability of
failing to meet the standard is 0.08). After much debate, GGG management has decided to shut down
production of Go Bananas if at least five boxes in a weekly sample fail to meet the standard weight of
banana-flavored marshmallows.
Prepare a managerial report that addresses the following issues.
1. Calculate the probability that a weekly sample will result in a shutdown of production if the
production process is working properly. Comment on GGG management’s policy for deciding
when to shut down production of Go Bananas!
2. GGG management wants to shut down production of Go Bananas no more than 1% of the time
when the production process is working properly. Suggest the appropriate number of boxes in
the weekly sample that must fail to meet the standard weight of banana-flavored marshmallows
in order for production to be shut down if this goal is to be achieved.
3. Ms. Finkel has suggested that if given sufficient resources, she could redesign the production
process to reduce the percentage of 16-ounce boxes of Go Bananas that fail to meet the
standard weight of banana-flavored marshmallows when the process is working properly. To
what level must Ms. Finkel reduce the percentage of 16-ounce boxes of Go Bananas that fail to
meet the standard weight of banana-flavored marshmallows when the process is working
properly in order for her to reduce the probability at least five of the sampled boxes fail to meet
the standard to .01 or less?
