TABLE 10-12 A Quality Control Engineer Is in Charge of the Manufacture

question 72

Multiple Choice

TABLE 10-12
A quality control engineer is in charge of the manufacture of computer disks. Two different processes can be used to manufacture the disks. He suspects that the Kohler method produces a greater proportion of defects than the Russell method. He samples 150 of the Kohler and 200 of the Russell disks and finds that 27 and 18 of them, respectively, are defective. If Kohler is designated as "Group 1" and Russell is designated as "Group 2," perform the appropriate test at a level of significance of 0.01.
-Referring to Table 10-12, the hypotheses that should be tested are

• A) H₀: π₁ - π₂ = 0 versus H₁: π₁ - π₂ ≠ 0.
• B) H₀: π₁ - π₂ ≠ 0 versus H₁: π₁ - π₂ = 0.
• C) H₀: π₁ - π₂ ≤ 0 versus H₁: π₁ - π₂ > 0.
• D) H₀: π₁ - π₂ ≥ 0 versus H₁: π₁ - π₂ < 0.

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Definitions:

Net Cash Flows

The difference between a company's cash inflows and cash outflows within a specific period.

Net Present Value

A method of evaluating investment opportunities that calculates the difference between the present value of cash inflows and outflows over a period of time.

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.