A producer of pocket calculators purchases the main processor chips in lots of1,000. The producer would like to have a 1 percent rate of defectives but willnormally not refuse a lot unless it has 4 percent or more defectives. Samples of50 are drawn from each lot, and the lot is rejected if more than two defectives arefound.a. What are p0, p1, n, and c for this problem?

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A producer of pocket calculators purchases the main processor chips in lots of
1,000. The producer would like to have a 1 percent rate of defectives but will
normally not refuse a lot unless it has 4 percent or more defectives. Samples of
50 are drawn from each lot, and the lot is rejected if more than two defectives are
found.
a. What are p0, p1, n, and c for this problem?

Expert Solution
Step 1

Given information:

The population lot size is 1000 and the sample size is 50.

Step 2

(a)

From the given question, the producer is like to have a 1% rate of defective. 

The acceptable quality level or p0 will be,

p0=1%=0.01

So, the value of p0 is 0.01.

As the producer will reject a lot if the number of defectives is 4% or more. So, the lot tolerance percent defective or p1will be,

p1=4%=0.04

So, the value of p1 is 0.04.

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