Suppose That You Have Calculated the Control Limits for a P-Chart

question 48

Multiple Choice

Suppose that you have calculated the control limits for a p-chart to be the following:
LCL = 0.02 and UCL = 0.08.
Today, you took 10 samples of 20 units each. The first nine samples each had one defect. The last sample had zero defects. What can you conclude?

• A) the process is out of control
• B) the process is in a state of control
• C) the last sample should be ignored because it was "too good"
• D) you calculated the limits incorrectly because the LCL must be either negative or 0
• E) the sample size must be increased

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Definitions:

Bankruptcy

A legal proceeding involving a person or business that is unable to repay their outstanding debts, leading to the assets being allocated to creditors.

Indirect Costs

Expenses that are not directly attributable to a specific product or activity but are necessary for the business's operation, such as utilities or administrative salaries.

Financial Distress

A scenario in which a corporation is unable to fulfill or struggles with settling its debts to those it owes money.

Earnings Per Share

A financial ratio indicating the amount of profit attributed to each outstanding share of a company's common stock, calculated as net income divided by the number of shares.