Question

You decided to use attributes sampling in your testing of Frederics Clothing sales procedures for the year ended July 31, 2018. The client has a straight-forward system that in previous years has yielded excellent results with conventional testing. Of course, the fact that July and August were the only two months ever tested could account for part of the excellent results. Recently, however, the gross margin of Frederics has somewhat declined. Although a cause has not yet been determined, there is a concern that some shipments are unintentionally not being billed. For every duplicate invoice, a shipping document is attached. In addition, there is a separate file of prenumbered ship documents filed in numerical order. There is a formal pricelist that can be deviated from only with an authorized signature from Bill Newshirt. George Sloppyslacks authorizes credit by initialing the sales document before shipment. There are 12,340 sales invoices for the year, beginning with invoice number 18721 and ending with 31060. There are 13,590 shipping documents, because some shipments are combined for billing. The shipping documents begin with 12893 and end with 26482. Required: a. Define the sampling unit to test for unbilled shipments. Why did you use that sampling unit?

Answer 1

The units to be checked will be 18735, 19234, 20125, 20468, 20677, 22643, 24333, 24459, 26789, 27865, 28965, 29353, 30188, 30576, and 30987. While choosing the above numbers it has been ensured that no particular trend is set while deciding the sample units. Thus, the main objective while deciding the sample units was to ensure there is no predetermined rules in selecting the sample units. Hence, each and every bill had the opportunity of being selected for sampling purpose.

This will help the organization to check whether there is anything wrong in the billing process. It because each and every single bill has the chance of being selected for sampling purposes thus, there is no predetermined bill for selection or rejection in the sampling units.