Suppose that only two incoming fraction defective levels, 4 percent and 8 percent, are possible. These incoming fraction defective levels are equally likely. At a 4 percent incoming fraction defective, there's a 60 percent chance that a lot will be accepted. At 8 percent incoming fraction defective, there's a 20 percent chance that a lot will be accepted. Lots that are not accepted are subject to 100 percent sorting. What is average outgoing quality?
A) 40 percent
B) 20 percent
C) 10 percent
D) 4 percent
E) 2 percent

Question

Quizplus · Accepted Answer

The average outgoing quality (AOQ) is calculated by considering the probability of acceptance and the defect rate for each incoming quality level. For 4% defect rate, the AOQ is 0.04 * 0.6 = 0.024. For 8% defect rate, the AOQ is 0.08 * 0.2 = 0.016. Since both levels are equally likely, the average AOQ is (0.024 + 0.016) / 2 = 0.02 or 2 percent.

Suppose That Only Two Incoming Fraction Defective Levels, 4 Percent