An Acceptance Sampling Plan

First we rewrite the essential ideas of the previous lesson in a different terminology. The lot (population of size N) consists of objects from a (manufacturing) process and are either defective or non—defective; the proportion of defectives in the lot is θ = D/N but D is unknown. The process has been “well— tuned” and the producer believes that θ ≤θ0a known number. If that is true, the producer considers this a “good lot” and expects to sell it. On the other hand, the consumer is unwilling to 0062uy a “bad lot” wherein the proportion of defectives is θ ≥θaa known number greater than θ0. In order to decide whether or not to buy the lot, the consumer insists on examining a sample (of size n); the consumer and the producer agree that the consumer can refuse the lot when the number X of defectives in the sample is too big, say X ≥ c.