THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING

question 165

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING:
As a purchasing agent,you are responsible for selecting sources of supply for manufactured components to use in your firm's production process.The salesman for a certain supplier has indicated that they can supply an electronic sub-assembly that has a defect rate of 1.1%-well below your current supplier's defect rate.You accept 100 sub-assemblies for evaluation,and find that there were four defects.
-Using the Poisson approximation to the binomial,how likely is it to get four or less defects out of 100?

---

Definitions:

Common Shares Outstanding

The total number of shares of common stock currently held by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders.

Additional Paid-In Capital

The excess of the amount paid by investors over the par value of a stock during equity issuance.

Hazardous Substances

Materials that can pose a risk to human health or the environment when not properly managed, including toxic, corrosive, or flammable chemicals.