A Quality Manager Has Established a Sampling Plan That Calls

question 74

Multiple Choice

A quality manager has established a sampling plan that calls for a sample size of 100 units and an acceptance number of 2.The supplier has agreed to a contract that calls for an AQL of 0.01 and an LTPD of .05.Which of the following statements is TRUE? Table G.1 is appended to this exam.

• A)Lowering the acceptance number to 1 will raise the probability of a type II error.
• B)Increasing the sample size will increase α.
• C)Raising the AQL to 0.02 will lower the chance of a type I error.
• D)Reducing the LTPD to 0.04 will reduce the chance of a type II error.

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Definitions:

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects receivables from customers, indicating the number of times average receivables are collected during a period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specified period, indicating the efficiency of inventory management.

Days' Sales In Inventory

Days' sales in inventory is a financial ratio that shows how many days, on average, it takes for a company to turn its inventory into sales, indicating inventory management efficiency.

Return On Common Stockholders' Equity

A measure of a company's profitability that shows how much profit is generated with the money shareholders have invested.