A manufacturer of hand-held calculators receives large shipments of printed circuits from a supplier. It is too costly and time-consuming to inspect all incoming circuits, so when each shipment arrives, a sample is selected for inspection. Information from the sample is then used to test H0: p = .01 versus Ha: p >.01, where p is the actual proportion of defective circuits in the shipment If the null hypothesis is not rejected, the shipment is accepted, and the circuits are used in the production of calculators. If the null hypothesis is rejected, the entire shipment is returned to the supplier because of inferior quality. (A shipment is defined to be of inferior quality if it contains more than 1% defective circuits.)
a. In this context, define Type I and Type II errors.
b. From the calculator manufacturer’s point of view, which type of error is considered more serious?
c. From the printed circuit supplier’s point of view, which type of error is considered more serious?