q a producer and customer agree to transact 10000


Q. A producer and customer agree to transact 10,000 widgets per day, and they will jointly inspect 120 widgets randomly selected from each lot. If there are more than 6 defective widgets the lot will be rejected; otherwise the transaction is completed. The producer uses Statistical Quality Control to ensure that it's percentage of defectives is no greater than 5%, and the producer is not willing to tolerate more than 10% defectives. What is Producer Risk and Customer Risk associated with this plan?

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