Decision Theory

Each social unit of measurement sells for $ 5 potentiometer sizing = degree centigrade0 units so the earning per swarm = $ 5000 There argon two postulates of nature: prototypic produce S1 = forged units per clutch 15% 2nd state S2 = speculative units per lot 35% If no reassessment for S1 cast of units defective = 15% x century0 = 150 approach of reserve of defective unit direct to the customer = $10 per unit thence the behave glowering = 5000 ¡V (150 x 10) = $ 3500 If no examineion for S2 add of units defective = 35% x 1000 = 350 Cost of replacement of defective unit send to the customer = $10 per unit then the indemnify mutilate = 5000 ¡V (350 x 10) = $ 1500 If 100% direction for S1 take in spot = 1000 x 2= 2000 Replacement damage = $0.50 x 150= $ 75 at that placeof the pay shoot = 5000 ¡V 2000 ¡V75 =2925 If 100% oversight for S2 sampling cost = 1000 x 2= 2000 Replacement cost = $0.50 x 350= $ 175 Therefore the pay off = 5000 ¡V 2000 ¡V175 =2825 PAY OFF bloodshed         S1: 15% (0.6)         S2: 35% (0.4) scrutinise 100%         $ 2925         $ 2825 Do non contemplate         $ 3500         $ 1500 Expected pay off if 100% inspection = 0.6 x 2925 + 0.4 x 2825 = $ 2885 Expected pay off if no inspection = 0.6 x 3500 + 0.

4 x 1500 = $ 2700 base on the memoir of the olden year and prior probabilities the caller-up should adopt 100% inspection plan. If a sample of size 2 is taken from the lot before deciding whether to inspect 100%: In a sample of 2 there are tercet possibilities: - ?X 0 unit is defective ?X 1 unit is defective ?X 2 units are defective fortune revision table for for each one sample outgrowth P (X=0/ p=0.15) = (2/0) x (0.15)^0 x (0.85)^2 = 0.7225 P (X=0/ p=0.35) = (2/0) x (0.35)^0 x (0.65)^2 =... If you want to clear a wide-cut essay, companionship it on our website: Ordercustompaper.com

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