Determining the standard procedure of inspecting


An electronics firm claims that the proportion of defective units of a certain process is 5%. A buyer has a standard procedure of inspecting 15 units selected randomly from a large lot. On a particular occasion, the buyer found 5 items defective.

(a) What is the probability of this occurrence, given that the claim of 5% defective is correct?

(b) What would be your reaction if you were the buyer?

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Finance Basics: Determining the standard procedure of inspecting
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