In the Table Below Are Selected Values for the OC

question 138

Essay

In the table below are selected values for the OC curve associated with the acceptance sampling plan n=50, c=1. (Watch out--the points are not evenly spaced.) Assume that upon failed inspection, defective items are replaced. Calculate the AOQ for each data point. (You may assume that the population is much larger than the sample.) Plot the AOQ curve. At approximately what population defective rate is the AOQ at its worst?
Explain how this happens. How well does this plan meet the specifications of AQL=0.0050, α =0.05; LTPD=0.05, β =0.10?
Discuss.
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Population percent } \\\text { defective }\end{array} & \begin{array} { c } \text { Probability of } \\\text { acceptance }\end{array} \\\hline 0.005 & 0.97387 \\\hline 0.01 & 0.91056 \\\hline 0.02 & 0.73577 \\\hline 0.03 & 0.55528 \\\hline 0.04 & 0.40048 \\\hline 0.05 & 0.27943 \\\hline 0.06 & 0.19000 \\\hline 0.08 & 0.08271 \\\hline\end{array}$$

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Definitions:

Equilibrium GDP

The level of GDP at which total supply and total demand in the economy are equal, resulting in no inherent tendency for the economy to change its level of output.

Full Employment GDP

The maximum output that an economy can produce without causing inflation, when all available resources are utilized efficiently.

Keynes

From the UK, this economist's theories ushered in a new era for macroeconomic practice and governmental economic policy-making.

The Classicals

Economists from the 18th and 19th centuries who laid the foundations of classical economics, focusing on free markets and self-regulating economies.