Number Reworked Number Produced Number Number Month Produced Month Reworked 1 23 3 11 17 3 2 28 3 12 4 3 16 1 13 14 4 6 14 41 2 15 18 6 6 32 4 16 7 29 17 33 4 8 19 18 46 9 12 1 19 21 7 10 7 1 20 29 7

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Applied Machines produces large test equipment for integrated circuits. The machines are made to order, so the production rate varies from month to month. Before shipping, each machine is subject to extensive testing. Based on the tests the machine is either passed or sent back for rework. During the past 20 months the firm has had to rework the following numbers of machines: (given)

Consider the example of Applied Machines presented above. Based on the estimate of the probability that a machine is sent back for rework computed from the 20 months of data, determine the following:
a. If the company produces 35 machines in one particular month, how many, on average, require rework?
b. Out of 100 machines produced, what is the probability that more than 20 percent of them require rework? (Use the normal approximation to the binomial for your calculations).

Number
Reworked
Number
Produced
Number
Number
Month
Produced
Month
Reworked
1
23
3
11
17
3
2
28
3
12
4
3
16
1
13
14
4
6
14
41
2
15
18
6
6
32
4
16
7
29
17
33
4
8
19
18
46
9
12
1
19
21
7
10
7
1
20
29
7
Transcribed Image Text:Number Reworked Number Produced Number Number Month Produced Month Reworked 1 23 3 11 17 3 2 28 3 12 4 3 16 1 13 14 4 6 14 41 2 15 18 6 6 32 4 16 7 29 17 33 4 8 19 18 46 9 12 1 19 21 7 10 7 1 20 29 7
Expert Solution
Step 1
Month Number produced Number reworked Proportion reworked
1 23 3 0.13043478
2 28 3 0.10714286
3 16 1 0.0625
4 6 0 0
5 41 2 0.04878049
6 32 4 0.125
7 29 5 0.17241379
8 19 2 0.10526316
9 12 1 0.08333333
10 7 1 0.14285714
11 17 3 0.17647059
12 4 0 0
13 14 2 0.14285714
14 0 0 0
15 18 6 0.33333333
16 0 0 0
17 33 4 0.12121212
18 46 5 0.10869565
19 21 7 0.33333333
20 29 7 0.24137931
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