A P-Chart Has Been Developed for a Particular Item

question 84

Essay

A p-chart has been developed for a particular item.In the past, 4% of such items have been found to be defective.If a sample of 100 is taken, and 9 of these are found to be defective, should the process be considered out of control based on 99.7% control limits? Explain.

---

Definitions:

Income Elasticity

A measure of how the demand for a good or service changes with a change in the consumer's income.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with high elasticity indicating greater responsiveness.

Total Expenditures

The sum of all spending or expenses incurred by an individual, household, or organization.

Perfectly Inelastic

describes a situation where the demand for a product does not change in response to changes in its price.