Question

In: Statistics and Probability

A company is interested in tracking defective capacitors. The process normally yields 5% defective product. A...

A company is interested in tracking defective capacitors. The process normally yields 5% defective product. A sample of 400 capacitors is selected.

Explain why we would use the binomial distribution in this case

Solutions

Expert Solution

A binomial distribution can be thought of as simply the probability of a SUCCESS or FAILURE outcome in an experiment or survey that is repeated multiple times. The binomial is a type of distribution that has two possible outcomes . For example, a coin toss has only two possible outcomes: heads or tails and taking a test could have two possible outcomes: pass or fail.

The first variable in the binomial formula, n, stands for the number of times the experiment runs. The second variable, p, represents the probability of one specific outcome (success).

Binomial distributions must also meet the following three criteria:

  1. The number of observations or trials is fixed.  
  2. Each observation or trial is independent. In other words, none of your trials have an effect on the probability of the next trial.
  3. The probability of success is exactly the same from one trial to another.

Here n=400

So number of observations are fixed.

If we treat defective item as success then

p=0.05

Getting one item defective is independent of getting another item defective.

Also probability of getting defective item is same for each trail.

Because of all these, we would use the binomial distribution in this case.


Related Solutions

Peggy Company makes and sells a product that normally sells for $57. Because of a defective...
Peggy Company makes and sells a product that normally sells for $57. Because of a defective machine, 1,000 units were not produced correctly and remain in inventory. Each of the defective unit has the following costs assigned to it by the company's absorption costing system: Direct materials $6.00 per unit Direct labor $2.00 per unit Variable Overhead $2.25 per unit Fixed Overhead $1.8 per unit The company has two options regarding the defective units: (1) be sold for $8 per...
Peggy Company makes and sells a product that normally sells for $57. Because of a defective...
Peggy Company makes and sells a product that normally sells for $57. Because of a defective machine, 1,000 units were not produced correctly and remain in inventory. Each of the defective unit has the following costs assigned to it by the company's absorption costing system: Direct materials $6.00 per unit Direct labor $2.00 per unit Variable Overhead $1.75 per unit Fixed Overhead $1.8 per unit The company has two options regarding the defective units: (1) be sold for $8 per...
Piti Corp. makes and sells a product that normally sells for $19. Because of a defective...
Piti Corp. makes and sells a product that normally sells for $19. Because of a defective machine, 1,000 units were not produced correctly and remain in inventory. Each of the defective unit has the following costs assigned to it by the company's absorption costing system: Direct materials $5.00 per unit Direct labor $3.00 per unit Variable Overhead $2.5 per unit Fixed Overhead $0.25 per unit The company has two options regarding the defective units: (1) be sold for $8 per...
If a process was a 5 sigma process and the specifications for the product are .5”...
If a process was a 5 sigma process and the specifications for the product are .5” +/-.00001”, and the mean of the process has shifted 1.25 SD above the desired mean, what is the current Cpk? Is the process producing any out of tolerance products at this point, if so, what proportion?
Ebay manufactures from XY products from a process that yields a by-product called LAN. The by-product...
Ebay manufactures from XY products from a process that yields a by-product called LAN. The by-product requires additional processing cost of $30,000. The by-product will require selling and administrative expenses totaling $20,000. It is Ebay's accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during  the year ended December 31, 2019 follows: WAN Units produced: 100,000 Market Value at SOP: $50 Unit Sold 60,000 LAN Units produced: 8,000 Market Value at SOP: $10...
A manufacturing company produces water filters for home refrigerators. The process has typically produced some defective...
A manufacturing company produces water filters for home refrigerators. The process has typically produced some defective liters. A random sample of 300 liters yielded 12 defects. Construct and interpret a 90% confidence interval for the true proportion of defective water liters.
​The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process.
The Money Pit Mortgage Company is interested in monitoring the performance of the mortgage process. Fifteen samples of five completed mortgage transactions each were taken during a period when the process was believed to be in control. The times to complete the transactions were measured. The means and ranges of the mortgage process transaction times, measured in days, are as follows: Sample123456789101112131415Mean201610191415171815161811131114Range6103781211149911581012Subsequently, samples of size 5 were taken from the process every week for the next 10 weeks. The times were...
Manufacturing incurs costs of $95 ($90 variable and $5 fixed) to make a product that normally...
Manufacturing incurs costs of $95 ($90 variable and $5 fixed) to make a product that normally sells for $120. A customer offers to buy 4,200 units at $90 each. What is the total manufacturing cost?
[13 marks] A company is interested in forecasting demand for a product. They have reason to...
[13 marks] A company is interested in forecasting demand for a product. They have reason to believe that the demand is not affected by any seasonal changes and that it does not increase or decrease systematically over time. They have data for the last 9 periods (below). Period 1 2 3 4 5 6 7 8 9 Demand 230 210 220 250 300 280 240 230 200 In each part of this question, show your work: show the equation you...
[13 marks] A company is interested in forecasting demand for a product. They have reason to...
[13 marks] A company is interested in forecasting demand for a product. They have reason to believe that the demand is not affected by any seasonal changes and that it does not increase or decrease systematically over time. They have data for the last 9 periods (below). Period 1 2 3 4 5 6 7 8 9 Demand 230 210 220 250 300 280 240 230 200 In each part of this question, show your work: show the equation you...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT