A Random Sample of 49 Cast Aluminum Pots Is Taken

question 79

Multiple Choice

A random sample of 49 cast aluminum pots is taken from a production line once every day.The number of defective pots is counted.The proportion of defective pots has been closely examined in the past and is believed to be 0.05. Refer to Exhibit 7-11.The sample proportions for the week are shown in the accompanying table. Is the production process in control?

• A)No,since the sample proportions show a downward trend
• B)No,since the sample proportions fall within the upper and lower control limits
• C)Yes,since the sample proportions show a downward trend
• D)Yes,since the sample proportions fall within the upper and lower control limits

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Definitions:

Sensitivity Analysis

An approach utilized to assess the effects that changes in an independent variable have on a designated dependent variable within established assumptions.

Final Outcome

The ultimate result or conclusion reached after a series of events or processes.

Hard Rationing

A situation in which companies cannot obtain funds for projects through internal sources and external financial markets are unwilling or unable to lend.

Net Present Values

A method of evaluating the profitability of an investment by calculating the present value of all expected future cash flows minus the initial investment cost.