Reference Figure 15.5 of the text, which can also be found in both the publishers slides for Chapter 15 and the Panopto recording for Chapter 15 selected slides. Management has instituted a zero-defects program and it is considering changing the sampling plan acceptance number from c = 2 to c = 0 while leaving the sample size at n = 89. The supplier of the sampled lots has contractually agreed to an acceptable quality level (AQL) of 0.01 (i.e., assume on most lots that p = 0.01). If a lot is rejected, the supplier must provide resources for 100% inspection as part of a rectifying inspection program. The amount of time required to 100% inspect a lot is such that production at the factory will likely be idled for an hour with each rejected lot, and the factory receives one lot per day from the supplier. Conversely, defective units of the supplied product are easily identified and discarded at the factorys production line with a near-zero chance of having completed assemblies shipped to end users with the defective supplied parts in them. What recommendation(s) would you make to management given the dual mandate of both driving higher levels of quality throughout the supply chain and maintaining near-perfect on-time delivery performance with end users? Assume that increasing sample size n is not an option as management is not willing to pay for more inspections.

Textbook: Introduction to statistical quality control 8th edition, Douglas C. Montgomery.