The Mineral Water company purchases the label that is pasted on each bottle of water it sells. The label contains the company logo, the name of the product, and directions for the products use. Sometimes the printing on the label is blurred or the colours are not right. The company wants to design an acceptance sampling plan for the purchased item. The acceptable quality level is 2 defectives per 500 labels, and the lot tolerance proportion defective is 7 percent. Management wants to limit the producers risk to 9 percent or less and the consumers risk to 5 percent or less.

a) ) Specify a plan that satisfies those desires.

b) Construct an Operating Characteristics curve for the chosen plan. What is the probability that a shipment with 2 percent defectives will be rejected by the plan?