Romi, a Production Manager, Is Trying to Improve the Efficiency

question 143

Multiple Choice

Romi, a production manager, is trying to improve the efficiency of his assembly line. He knows that the machine is set up correctly only 60% of the time. He also knows that if the machine is set up correctly, it will produce good parts 80% of the time, but if set up incorrectly, it will produce good parts only 20% of the time. Romi starts the machine and produces one part before he begins the production run. He finds the first part to be good. What is the revised probability that the machine was set up correctly?

• A) 48%
• B) 56%
• C) 86%
• D) 96%

---

Definitions:

Required Rate of Return

A rephrased definition; the minimum percentage of return investors demand from an investment to compensate for its risk.

Constant Rate

A constant rate implies a steady, unchanging rate of growth or return over a specified period of time.

Year-End Dividend

A dividend payment made by a company to its shareholders at the end of its fiscal year.

Recreational Vehicles

Motor vehicles or trailers equipped with living space and amenities found in a home, used for travel or camping.