The Quality Control Manager for NKA Inc

question 42

Short Answer

The quality control manager for NKA Inc. must decide whether to accept (alternative 1), further analyze (alternative 2), or reject (alternative 3) an incoming shipment (lot) of microchips. The historical data indicate that there is a 30 percent chance that the lot is poor quality (S₁), 50 percent chance that the lot is fair quality (S₂), and 20 percent chance that the lot is good quality (S₃). Assume the following payoff table is available. The values in the payoff table are in thousands of dollars.
What alternative action should be selected according to the expected monetary value criterion?

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Definitions:

High Costs

Expenses that are significantly above average, often impacting profitability or affordability.

Technological Conditions

The state and evolution of technology within an industry or environment, impacting operations and competitiveness.

Social Networking Sites

Online platforms that facilitate the creation and sharing of information, ideas, personal messages, and other content within networks of contacts.

Millennial

A person born approximately between the early 1980s and late 1990s; often characterized by their familiarity with technology, media, and digital communications.