A Lot of 2,000 Items Has Just Arrived

question 7

Multiple Choice

A lot of 2,000 items has just arrived. A single sampling calls for a sample size of 100 and c = 3. What is the average outgoing quality limit, assuming that all defectives in the entire lot are replaced if it is rejected and all defectives are replaced in the sample if it is accepted? Table G.1 is appended to this exam.

• A) less than or equal to 0.0150
• B) greater than 0.0150 but less than or equal to 0.0175
• C) greater than 0.0175 but less than or equal to 0.0200
• D) greater than 0.0200

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Definitions:

Activity Rate

The estimated activity cost divided by estimated activity-base usage.

Production Setup

The preparation and arrangement of tools, machines, and equipment necessary for the commencement of production operations in a manufacturing environment.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much revenue contributes to fixed costs and profit.

Contribution Margin

The amount by which the sale of a product or service exceeds its variable costs, contributing to covering fixed costs and generating profit.