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.

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Definitions:

Organization's Mistakes

Errors or miscalculations made by a business or an entity that can lead to setbacks or challenges but also offer opportunities for learning and improvement.

Probability of Effect

The likelihood that a specific outcome or impact will occur as a result of a certain action or event.

Harm

Physical injury or damage to someone's health or well-being, or the potential to cause such effects.

Benefit

A positive outcome or advantage that results from a particular situation, action, or policy.