A large restaurant contracts with a local laundry to wash white napkins. The laundry returns the napkins in bundles of one-hundred napkins. The restaurant randomly samples ten napkins from each bundle to make sure that the napkins are clean with no stains or other defects. By sampling only ten of the napkins, the restaurant may conclude that the all the napkins are clean and use the bundle, but the napkins are actually dirty and should not be used. This sampling risk is called
A) producer's risk
B) uncertainty
C) consumer's risk
D) inspection risk

Question

Quizplus · Accepted Answer

The sampling risk described in the scenario is the risk of accepting a batch or bundle of napkins as being of good quality when, in fact, it contains defects or issues. This is a consumer's risk because the restaurant is the consumer or user of the napkins and could suffer consequences such as customer complaints or loss of reputation if the napkins are not actually clean. Option A is incorrect as producer's risk is the risk of rejecting a high-quality batch, while option B is too vague to be the correct answer. Option D is also incorrect as inspection risk is the risk that a chosen sample is not representative of the whole batch.

A Large Restaurant Contracts with a Local Laundry to Wash