A Company Purchases Shipments of Machine Components and Uses This

question 85

Multiple Choice

A company purchases shipments of machine components and uses this acceptance sampling plan: Randomly select and test 20 components and accept the whole batch if there are fewer than 3 defectives.If a particular shipment of thousands of components actually has a 4% rate of defects,what is the probability that this whole shipment will be accepted?

• A)0.9561
• B)0.0439
• C)0.0364
• D)0.5141
• E)0.1458

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Definitions:

Elasticity of Product Demand

The degree to which the demand for a product changes in response to a change in its price.

Labor Costs

The total expenditure by businesses for paying their employees, including wages, benefits, and taxes.

Labor-Intensive

A process or industry that requires a large amount of labor relative to capital in its production processes.

Production Techniques

Methods or processes used in the transformation of inputs into outputs in the production of goods or services.