The Quality Control Manager for the NKA Inc Based on Historical Data,if the Lot Is of Poor Quality,40

question 1

Multiple Choice

The quality control manager for the NKA Inc.must decide whether to accept (alternative 1) ,further analyze (alternative 2) ,or reject (alternative 3) the shipment (lot) of incoming material.The historical data indicates that there is 30% chance that the lot is poor quality (S₁) ,50% chance that the lot is fair quality (S₂) ,and 20% 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. $$\begin{array} { l c c c } & { \text { States of Nature } } \\\text { Decision } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } & \mathrm {~S} _ { 3 } \\\text { Accept } & 20 & 30 & 90 \\\text { Further analyze } & 60 & 70 & 15 \\\text { Reject } & 80 & 50 & 30\end{array}$$
Based on historical data,if the lot is of poor quality,40% of the items are defective.If the lot is fair quality,22% of the items are defective.If the lot is good quality,10 % of the items are defective.The quality control manager inspects one unit from a recent shipment.After inspecting one unit,the manager determines that the unit is defective.Based on this additional information,what is the revised (posterior) probability for the accept state?

• A)24
• B)52
• C)18
• D)39
• E)48

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Definitions:

Compliance Strategies

Techniques used to persuade or influence someone to conform to rules or wishes.

Persuasion

The process of convincing someone to do or believe something through reasoning or the use of emotion.

Lower Power Parties

Those participants in a negotiation or conflict who possess less influence, resources, or status compared to other parties involved.

Business Deals

Agreements or transactions between businesses or individuals for the purchase, sale, or exchange of goods, services, or information.