The production of nonconforming items is of critical concern because it increases costs and reduces productivity. Identifying the causes behind the production of unacceptable items and taking remedial action are steps in the right direction. To begin, we decide to estimate the proportion of nonconforming items in a process to within 3% with a probability of 0.98.
(a) Previous information suggests that the percentage nonconforming is approximately 4%. How large a sample must be chosen?
(b) If no prior information is available on the proportion nonconforming, how large a sample must be chosen?