-Samples of 100 Checks Each Were Taken at a Bank

question 55

Multiple Choice

$$\begin{array}{l}\text { Table } 7.3\\\begin{array} { | c | l | } \hline \text { Sample Number } & \text { Number Defective } \\\hline 1 & 1 \\2 & 4 \\3 & 2 \\4 & 4 \\5 & 0 \\\hline\end{array}\end{array}$$
-Samples of 100 checks each were taken at a bank from an encoding machine (which records the amount of a check) over a five- day period. Details are summarized in the Table 7.3. If the bank were to use the average proportion defective from these five samples as the central line for a process control chart, what would be the central line?

• A) less than or equal to 0.01
• B) greater than 0.01 but less than or equal to 0.02
• C) greater than 0.02 but less than or equal to 0.03
• D) greater than 0.03

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Definitions:

Efficient

Refers to a level of performance that uses the least amount of inputs to achieve the highest amount of output.

Goods and Services

Goods and services constitute the output produced by an economy, with goods being tangible items and services being intangible offerings that value to consumers.

Specialization

The process of focusing effort and resources on a specific area of production or knowledge to increase efficiency and output.

Absolute Advantage

The ability of a country, individual, or firm to produce a greater quantity of a good or service than competitors using the same amount of resources.