A Company Manufactures Shoes in Three Different Factories

question 49

Multiple Choice

A company manufactures shoes in three different factories. Factory Omaha Produces 25% of the companyʹsshoes, Factory Chicago produces 60%, and factory Seattle produces 15%. One percent of the shoes produced inOmaha are mislabeled, 0.5 % of the Chicago shoes are mislabeled, and 2% of the Seattle shoes are mislabeled.If you purchase one pair of shoes manufactured by this company what is the probability that the shoes aremislabeled? Round to the nearest thousandth.

• A) 0.009
• B) 0.036
• C) 0.043
• D) 0.020

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Definitions:

Conglomerate Mergers

A type of merger where two or more companies in unrelated industries combine business operations to reduce risk and diversify their business interests.

Concentrated Industries

Industries in which a small number of companies hold a large market share, resulting in reduced competition.

R&D

Research and Development: Activities in connection with corporate or governmental innovation.

Marginal Cost

The spending necessary to fabricate one more unit of a good or service.