TQM promotes teamwork by modifying or eliminating traditional (and rigid) vertical hierarchies and instead forming flexible groups of specialists. Quality circles, cross-functional teams, and self-managed teams are typical formats. Teams are an excellent means of encouraging the sharing of ideas and removing process improvement obstacles.

The coefficient of correlation r) measures the strength of the linear relationship between the dependent and independent variables. The magnitude of r is independent of the scales of measurement of x and y. The coefficient lies between -1.0 and +1.0. A value of zero indicates no linear relationship between the x and y variables. A value of +1.0 indicates a perfectly direct relationship, and a value of-1.0 indicates a perfectly inverse relationship.

To achieve the maximum expected profit, 30 yachts should be built. For each level of production, multiply the probability of demand by the expected profit. The computation for the maximum is: 0.1(-US $10) + 0.2($10) + 0.5($30) + 0.2($30) = US $22.

The lower the exercise price, the more valuable the call option. The exercise price is the
price at which the call holder has the right to purchase the underlying share.