Ace Computer Manufacturer Buys Disk Drives in Lots of 5,000

question 99

True/False

Ace Computer Manufacturer buys disk drives in lots of 5,000 units from a supplier in California. The contract calls for, at most, 3 percent of the disk drives to be defective. When a shipment arrives, a sample of n = 15 parts is selected. If zero defects are found in this sample, the shipment is accepted. If 3 or more defects are found, the shipment is rejected and sent back to the supplier. If the number of defects found is 1 or 2, a second sample of 15 parts is selected. If this sample yields 1 or fewer defects, the shipment is accepted; otherwise the shipment is rejected. Based on a binomial distribution, the probability that Ace will reject a shipment of parts that meets the contract requirements is approximately 0.0355.

---

Definitions:

Seller

A person or organization that provides products or services for purchase by customers or other companies.

Buyer

An individual or entity that purchases goods or services from a seller for compensation.

Forged Cashier's Check

A counterfeit document made to look like a legitimate cashier's check, used in fraudulent transactions.

Innocent Purchaser

An individual who buys property without knowledge of any existing claims, disputes, or defects associated with it.