Essay
The quality control manager for the NKA Inc.must decide whether to accept (alternative 1),further analyze (alternative 2),or reject (alternative 3)the shipment (lot)of incoming material.The historical data indicates that there is 30% chance that the lot is poor quality (S1),50% chance that the lot is fair quality (S2),and 20% chance that the lot is good quality (S3).Assume the following payoff table is available.The values in the payoff table are in thousands of dollars. Based on historical data,if the lot is poor quality,40% of the items are defective.If the lot is fair quality 22% of the items are defective.If the lot is good quality,10% of the items are defective.The quality control manager inspects one unit from a recent shipment.
After inspecting it,he determines that the unit is defective.If the inspected item is defective,determine which alternative action the quality control manager should choose.
Correct Answer:

Verified
Choose alternative 2 and further analyze...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q25: The _ criterion for choosing among alternative
Q64: The _ criterion finds the best possible
Q80: A pharmaceutical company manufacturing pregnancy test kits
Q81: The alternatives 1 and 2 in the
Q83: The quality control manager for the NKA
Q84: An automobile insurance company is in the
Q85: The alternatives 1 and 2 in the
Q86: Maximin is a criterion used when making
Q89: An automobile insurance company is in the
Q90: The quality control manager for the NKA