A new production process at MakeIt Inc. has two in-line stages. The probability of defective components being produced in stage 1 is 15 percent and 10 percent in stage 2. Assembled units that have defective components only from stage 1 OR only from stage 2 are considered repairable. However items that have defective components from both stage 1 and stage 2 (completely defective) must be scrapped.
1. Use a probability tree diagram and calculate the probabilities that the MakeIt Inc. assembled units are:
a. defective in stage 1 and defective in stage 2 (are completely defective)
b. defective in stage 1 and are not defective in stage 2 (called Repairable I)
c. not defective in stage 1 but are defective in stage 2 (called Repairable II)
d. not defective in stage 1 and are not defective in stage 2 (completely good)
e. What is the probability of producing repairable assembled units?
2. Describe a situation in an administrative or services business where this sort of defect probability analysis may appropriately be used.