In a manufacturing process, lots having 6%, 8%, 10% or 12% defectives are produced according to the respective probabilities 0.35, 0.3, 0.25 and 0.1. Three customers have contracts to receive lots from the manufacturer. The contracts specify that the percentages of defectives in lots shipped to customers A, B and C should not exceed 6, 10 and 12, respectively. If a lot has a higher percentage of defectives that stipulated, a penalty of $ 150 per percentage point is incurred. On the other hand, supplying better quality than required costs the manufacturer $100 per percentage point. If the lots are not inspected prior to shipment, which customer should have the highest priority for receiving the order?

In a manufacturing process, lots having 6%, 8%, 10% or 12% defectives are produced according to the respective probabilities 0.35, 0.3, 0.25 and 0.1. Three customers have contracts to receive lots from the manufacturer. The contracts specify that the percentages of defectives in lots shipped to customers A, B and C should not exceed 6, 10 and 12, respectively. If a lot has a higher percentage of defectives that stipulated, a penalty of $ 150 per percentage point is incurred. On the other hand, supplying better quality than required costs the manufacturer $100 per percentage point. If the lots are not inspected prior to shipment, which customer should have the highest priority for receiving the order?

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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