A producer of pocket calculators purchases the main processor chips in lots of 1,000. The producer would like to have a 1 percent rate of defectives but will normally not refuse a lot unless it has 4 percent or more defectives. Samples of 50 are drawn from each lot, and the lot is rejected if more than two defectives are found.

a. What are p0, p1, n, and c for this problem?

b. Compute  and . Use the Poisson approximation for your calculations.