A Company Manufacturing Computer Chips Finds That 8% of All

question 20

Essay

A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that employee inattention is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to offer incentives to employees who have lower defect rates on their shifts. The incentive program is instituted for one month. If successful, the company will continue with the incentive program.
-In this context describe a Type I error and the impact such an error would have on the company.

---

Definitions:

Hospice

A place for the care of terminally ill patients.

Dying

The process of ceasing to live; ending of life's biological functions.

Companionship

The feeling of fellowship or friendship with others, often providing emotional support or a sense of belonging.

Mexican Americans

People of Mexican descent living in the United States, often retaining cultural, linguistic, and historical ties to Mexico.