An Item Is Purchased with One Surface Polished to a Specified

question 34

Multiple Choice

An item is purchased with one surface polished to a specified finish quality. From each incoming shipment, a sample of items is randomly selected and the polished surface of each sample item is compared with a standard and judged to be either acceptable or unacceptable. The following parameters have been established: AQL = 0.02, = 0.05, LTPD = 0.09, and = 0.10. Table G.1 is appended to this exam. What are the sample size and the acceptance number?

• A) n = 89, c = 4
• B) n = 39, c = 1
• C) n = 43, c = 1
• D) n = 237, c = 15

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Definitions:

Long-term Investment

Investments made by a company to hold for more than one year, often in bonds, stocks, or real estate.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Average Rate

A term often used in finance to denote the mean of various rates of interest or exchange rates over a given period.

Capital Investment

Funds invested in a business by the owners or partners for long-term growth and financial stability.