The Quality Control Manager for NKA Inc

question 15

Essay

The quality control manager for NKA Inc.must decide whether to accept (alternative 1),further analyze (alternative 2),or reject (alternative 3)a shipment (lot)of incoming material.The historical data indicate that there is a 30 percent chance that the lot is poor quality (S₁),50 percent chance that the lot is fair quality (S₂),and 20 percent chance that the lot is good quality (S₃).Assume the following payoff table is available.The values in the payoff table are in thousands of dollars.

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Definitions:

Fewest Assumptions

A principle suggesting that the simplest explanation, requiring the least speculative assumptions, is often the most accurate.

Casual Observation

An informal method of gathering data or evidence without a structured framework or hypothesis in mind.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, characterized by open-mindedness, skepticism, and an analytical approach.

Gut Feelings

Intuitive judgments and responses that are not the result of conscious reasoning.