Production managers on an assembly line must monitor the output to be sure that

Question

Production managers on an assembly line must monitor the output to be sure that the level of defective products remains small. They periodically inspect a random sample of the items produced. If they find a significant increase in the proportion of items that must be rejected, they will halt the assembly process until the problem can be identified and repaired. a) In this context, what is a Type I error? b) In this context, what is a Type II error? c) Which type of error would the factory owner consider more serious? d) Which type of error might customers consider more serious?

Explanation / Answer

a) Type I error will be to conclude that there is a significant increase in proportion of defective items when there was no significane increase.

b) Type II error will be to conclude that there is not significant increase in proportion of defective items when there was a significant increase in the proportion.

c) Type I error would be more serious for rhe factory owner because the assemble process would be halt.

d) Type II error would be more serious for the customer because they will receive more proportion of faulty items.

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