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:

Internal Supply

The availability of existing employees who can be promoted, transferred, or otherwise moved to fill open positions within an organization.

Markov Analysis

A statistical technique that uses probabilities to predict future states in a system based on its current state, often used for decision making and forecasting.

Human Resources Supply

The availability of potential employees, both within and outside the organization, who possess the skills and qualifications to meet its labor needs.

Demand

The desire and ability of purchasers to buy goods and services at different prices.