Describe the process of a double-sampling plan
What will be an ideal response?
In a double-sampling plan, management specifies two sample sizes (n1 and n2 ume) and two acceptance numbers (c1 and c2). If the quality of the lot is very good or very bad, the consumer can make a decision to accept or reject the lot on the basis of the first sample, which is smaller than in the single-sampling plan. To use the plan, the consumer takes a random sample of size n1. If the number of defects is less than or equal to (c1), the consumer accepts the lot. If the number of defects is greater than (c2), the consr rejects the lot. If the number of defects is between c1 and c2, the consumer takes a second sample of size n2. If the combined number of defects in the two samples is less than or equal to c2, the consumer accepts the lot. Otherwise, it is rejected. A double-sampling plan can significantly reduce the costs of inspection relative to a single-sampling plan for lots with a very low or very high proportion defective because a decision can be made after taking the first sample. However, if the decision requires two samples, the sampling costs can be greater than those for the single-sampling plan.
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Which of the following statements regarding reinstatement of a sickness and accident insurance policy is NOT correct?
A) If an application is required, the policy is automatically reinstated 45 days after the application is submitted so long as the application is not approved or disapproved before that time. B) A reinstated policy only covers loss due to sickness for the first 10 days. C) The reinstatement provision must be included in every sickness and accident insurance policy. D) The insurer's acceptance of a late premium without requiring a reinstatement application constitutes automatic reinstatement.
Market values:
a. reflect expected selling prices given the current economic situation b. are affected by the accounting methods selected c. are equal to the initial cost minus the depreciation to date d. either remain constant or increase over time e. are equal to the greater of the initial cost of the current expected sales value