Decision Carter Electronics manufactures several hand-held battery-operated devices. To maintain quality. Carter has always manufactured its own batteries. However, after reviewing the number of devices that were returned because of defective batteries last month, Carter began outsourcing battery production to two battery manufacturers — Monk and Worn- mack. Rather than destroy its existing inventory of in-house manufactured batteries, Carter continued to use its batteries in manufacturing along with the outsourced batteries until the inventory was depleted. Carter has set its maximum acceptable defect rate at 5% and has asked you to evaluate the outsourcing decision.

The Excel data files for answering this problem can be found in WiIeyPLUS.

Required

a. Using the defect data provided from last month, calculate the defect rate of the three battery sources. You may find Excel’s COUNTIFS function helpful. (NOTE: COUNTIFS evaluation is case-dependent.)

b. Which, if any, of the suppliers, meets the acceptable defect rate criterion?

c. Was Carter’s decision to outsource a good one? Why or why not?

d. What action do you recommend to Carter based on this data?