Your company supplies sterile syringes to a distributor of hospital supplies. The contract states that quality should be no worse than 0.1 percent defective, or 10 parts in 10,000. During negotiations, you learned that the distributor will use an acceptance sampling plan with n = 350 to test quality.
a. If the producer’s risk is to be no greater than 5 percent, what is the lowest acceptance number, c, that should be used?
b. The syringe production process averages 17 defective parts in 10,000. With n = 350 and the acceptance level suggested in part (a), what is the probability that a shipment will be returned to you?
c. Suppose that you want a less than 5 percent chance that your shipment will be returned to you. For the data in part (b), what acceptance number, c, should you have suggested in part (a)? What is the producer’s risk for that plan?