With reference to Example 9 10 for what values of Cw
With reference to Example 9.10, for what values of Cw and Cd will Strategy 2 be preferred?
Example 9.10
Suppose a manufacturer incurs warranty costs of Cw for every defective unit shipped and it costs Cd to detail an entire lot. The sampling inspection procedure is to inspect n items chosen at random from a lot containing N units, and to make the decision to accept or reject on the basis of the number of defective units found in the sample. Two strategies are to be compared, as follows:
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