A large restaurant contracts with a local laundry to wash white napkins. The laundry returns the napkins in bundles of 100 napkins. The restaurant randomly samples 10 napkins from each bundle to make sure that the napkins are clean with no stains or other defects. By sampling only 10 of the napkins,the restaurant may conclude that all of the napkins are clean and use the bundle,even when 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 bundle of napkins as clean when it actually contains dirty napkins. This risk is faced by the restaurant, the consumer of the laundry service, and is known as consumer's risk. Producer's risk refers to the risk of rejecting a good batch/lot from a supplier and inspection risk refers to the risk associated with faulty inspection processes. Uncertainty is a broader term that does not specifically relate to the scenario described.

A Large Restaurant Contracts with a Local Laundry to Wash