Acceptance sampling, Financial Econometrics

 

Acceptance Sampling is a statistical measure used in quality control. A company cannot test all of its products because of ruining the products, or the volume of products being very large. Acceptance sampling resolves this by checking a sample of product for defects. The process includes sample size, batch size and the number of defects suitable in the batch. This process permits a company to determine the quality of a batch with a particular degree of statistical certainty without having to check every unit of product. The statistical reliability of a sample is usually measured through a t-statistic. 

For Example - If a company manufactures millions of product and tests 10 units with one default then an hypothesis would be made on probability that 10,000 of the 1,00,000 are defective. Though, this could be a grossly inaccurate representation. More dependable conclusions can be made by raising the batch size higher than 10, and rising the sample size by doing more than merely one test and averaging the results. When done properly, acceptance sampling is a highly efficient tool in quality control.

 

 

 

Posted Date: 7/27/2012 1:42:56 AM | Location : United States







Related Discussions:- Acceptance sampling, Assignment Help, Ask Question on Acceptance sampling, Get Answer, Expert's Help, Acceptance sampling Discussions

Write discussion on Acceptance sampling
Your posts are moderated
Related Questions
Question 1: "When inflation twice surged to double digit level in the mid and late seventies, American named it public enemy number one." a) What are the main causes of in

Loudfire Safaris have requested you to prepare a cash budget for the period ending 31 March 2013. The following projections have been made for the next 4 months

Four European vanilla Call options ()iC· on an underlier with no interim cash flows, have identical maturity T. Their strike prices iK are such that 1234KKKK A trader buys ()1CK an

Q. Explain Moderate working capital policy? All the non-current assets and permanent asset are financed by long-term finance. The temporary fluctuating assets financed by short

If an investment is expected to return of 5 percent in the future, a $53,000 investment will grow to how much in 22 years?


All the non-current assets and part of permanent assets financed by long term. Remaining permanent assets all temporary fluctuating assets by short term. £65m long term debt and eq

Study the following Goget financial statements and answer the questions below. Statement of Comprehensive Income for the year ended 31 Dec 2012

Consider a recent merger between two major corporations. Describe the terms of the merger (cash or stock, premium, changes in management / directors, etc.). Explain the motivation

Power is a listed group reporting under IFRS. The group was established when Power purchased an 80% of the ordinary share capital of Shuttle, a listed company, on 1 January 2009 fo