Question: The Ziteck Corporation buys parts from international suppliers. One part is currently being purchased from a Malaysian supplier under a contract that calls for at most 5% defectives in the lot. When a shipment arrives, Ziteck randomly samples 10 parts. If it finds 2 or fewer defectives in the sample, it keeps the shipment; otherwise, it returns the entire shipment to the supplier.
a) Assuming that the conditions for the binomial distribution are satisfied, what is the probability that the sample will lead Ziteck to reject the shipment if the defect rate is actually 0.05? Show work.
b) Suppose the supplier is actually sending Ziteck 10% defectives. What is the probability that the sample will lead Ziteck to accept the shipment anyway? Show work.
c) Comment in detail on this sampling plan (sample size and accept/reject point). Do you think it favors either Ziteck or the supplier? Give reason for your answer. (100-200 words). General answers are not expected.