A Quality Inspector for Alpha-Beta Co

question 14

Multiple Choice

A Quality Inspector for Alpha-Beta Co.is concerned about the quality of the batch of several thousand Gizmos which his company produced this week and is preparing to ship.If he uses an acceptance sampling plan of n = 5 and c = 2,what will be the average outgoing quality (AOQ) for batches with 40% defectives?

• A)0.1270
• B)0.2730
• C)0.3174
• D)0.6826
• E)0.7270

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Definitions:

Expected Monetary Values

A calculation used in decision-making to determine the probable monetary gain or loss from an action, by multiplying possible outcomes by their respective probabilities and summing these products.

Payoffs

The returns or outcomes received from a particular action or investment, often discussed in game theory and economics.

Decision Alternative

Different courses of action or strategies that a decision-maker can choose from in a decision-making process.

State of Nature Probabilities

The likelihoods of different possible outcomes or states in a probabilistic model, often used in decision making and forecasts.