The Good Food Chain Has a Contract to Receive Eggs

question 127

Essay

The Good Food chain has a contract to receive eggs from a large egg producer. The eggs come in lots of 4,000 dozen each week. The contract specifies that the rate of broken or defective eggs should not exceed 8 percent. Each time a load comes in, Good Food warehouse employees select a random sample of n = 100 eggs and check to see if they are broken or defective. If Good Food wants no more than a 0.05 chance of rejecting the shipment, what should the cut-off be in terms of proportion of broken or defective eggs so that if the proportion is that value or more, the shipment will be rejected?

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Definitions:

Industrial Distributors

Companies that specialize in distributing goods, typically in large quantities, from manufacturers to various end users or retailers.

Marketing Channels

Pathways or routes through which goods and services flow from the producer to the consumer, including intermediaries like distributors and retailers.

Business Products

Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products.

Indirect Marketing Channel

A pathway of distribution involving one or more intermediaries (such as wholesalers or retailers) between the producer and the consumer.