Scenario 2 The purchasing department sources a component in large quantities in lots of 5000 units. Since each component cannot be individually tested for quality an agreement is made with the supplier that the lot should have a maximum defectives level of 9.6% and that the purchasing department will take only a 10% risk of accepting a bad lot. The supplier declares to provide an acceptable quality level of 3% defectives and is willing to take only a 5% risk of the entire lot being rejected. Refer to scenario 2 If the sample that is tested contains 10 defective items, which one of the following would be your conclusion?

options:

Reject 3% of components

Reject 9.6% of components

Reject 5% of components

Reject all 5000 components