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:

Special Order Price

The price charged for goods or services that are offered or produced in response to a specific, often one-time, order.

Variable Selling Expense

Costs associated with selling a product that vary directly with the volume of sales.

Specialized Machine Cost

The financial outlay for machinery designed for specific tasks or industries, often representing a significant capital investment.

Net Operating Income

The income generated from normal operations of a business, excluding expenses and revenues from non-operating activities like investments.