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.

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Definitions:

Loose Materials

Unconsolidated and uncompacted substances or objects, often used to describe soil, sand, or aggregate that is easily moved or reshaped.

Bedrock

The solid rock underlying loose deposits such as soil or alluvium, often exposed at the earth's surface or underlying younger sedimentary layers.

Mediterranean Sea

A sea connected to the Atlantic Ocean, surrounded by the Mediterranean region and almost completely enclosed by land.

Volcanic Eruption

A volcanic eruption is a geologic event during which magma (lava), gases, and ash are expelled from a volcano's vent to the surface.