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Seiko purchases watch stems for their watches in lots of 10,000. Seiko's sampling plan calls for checking 20 stems, and if 3 or fewer stems are defective, the lot is accepted.
a. Based on their sampling plan, what is the probability that a lot of 40 percent defective will be accepted?
b. Design an OC curve for incoming lots that have zero, 10 percent, 20 percent, 30 percent, and 40 percent defective stems.
Compare the margin of error for the interval estimates in parts (a), (b), and (c). The margin of error (Increases or Decreases) as p-bar gets smaller.
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