Question

A company believes that its defect rate is 20%. Having tested five devices, two are found to be defective. You are hired as a consultant to advise the company. What is your advice?

A. The defect rate is 40%

B. The defect rate does not appear to be 20%

C. More data should be collected to make a conclusion

D. The defect rate appears to be 20%

Answer 1

Ans . More data should be collected to make a conclusion.
Reason : Out of 5 devices tested, 2 are found to be defective.
Thus , defective rate is : Number of defective devices/ Total observed or tested
Defective Rate = 2/5 or 40%

But there might be chances of sampling error since we can't come to a final conclusion by just looking at 5 samples .
There might be difference in defective rate because of sampling as we can't test or verify each and every device that is being produced within the company.
So we need to take more sample or data to make us arrive to a specific conclusion.

Please like the answer,Thanks!