A Firm Uses Acceptance Sampling to Evaluate Batches of Inputs

Short Answer

A firm uses acceptance sampling to evaluate batches of inputs. Ideally, the defect rate would be no more than 3.5 percent. The firm knows that on occasion, batches with that defect rate or higher might be rejected. However, if the defect rate is less than or equal to 3.5 percent, the firm would like there to be very little chance of that batch being rejected. This value, 3.5 percent, is the firm's: