The billing department of a local department store sends monthly statements to the store’s customers. For those statements to reach the customer in a timely fashion, the addresses on the envelopes must be correct. Occasionally errors are made with the addresses. The billing department estimates that errors are made 2 percent of the time. For this continuous process, in which an error in the address is considered a nonconforming unit, what is the probability that in a sample size of eight, one address or less will be incorrect?

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Asked Nov 27, 2019
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The billing department of a local department store sends monthly statements to the store’s customers. For those statements to reach the customer in a timely fashion, the addresses on the envelopes must be correct. Occasionally errors are made with the addresses. The billing department estimates that errors are made 2 percent of the time. For this continuous process, in which an error in the address is considered a nonconforming unit, what is the probability that in a sample size of eight, one address or less will be incorrect?

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Expert Answer

Step 1

Let X is the number of incorrect address and it follows binomial distribution with the sample size of 8 and the probability of errors made is 0.02.

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That is, n8, p 0.02

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Step 2

The probability that one address or less will be incorrect can be ...

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BINOM.DIST(1,8,0.02,TRUE) D E F 0.989663

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