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A Certain Type of New Business Succeeds 60% of the Time

question 101

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A certain type of new business succeeds 60% of the time. Suppose that three such businesses open (where they do not compete with each other, so it is reasonable to believe that their relative successes would be independent) . Which of the following distributions would you use to determine the probability that all of them will fail?


Definitions:

Control Limits

Statistical boundaries defined in control charts that indicate the acceptable range of variability in a process.

Process Capability Analysis

A statistical technique to determine if a process has the capability to produce products that meet specifications.

Control Charts

Statistical tools used for monitoring and controlling a process by tracking its performance over time.

Special Causes

In the context of quality control, special causes refer to sources of variation that are not inherent to the process but arise due to external factors or irregular occurrences.

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