A manufacturer receives shipments of several thousand parts from a supplier every week.

The manufacturer

has the option of inspection before accepting the

parts. Inspection cost is $1 per unit. If parts are not inspected, defectives become apparent during a later assembly operation, at which time replacement cost is $6.25 per unit. LO1 & 2

1. At what proportion defective would the manufacturer prefer acceptancesampling?
2. For the sample size n = 15, what acceptance number c would result in probability of acceptance close to .95 for AQL =2%?
3. If the shipment actually contains 1 percent defective items and AQL =2percent:
4. What is the correctdecision?
5. What is the probability that the lot would be accepted if acceptable number c =0?
6. What is the probability that it would be rejected if c =0?
7. Answer the questions in part c for ashipment

that contains 3 percentdefectiveitems.