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It is known that screws produced by a certain company will be defective with probability .01 independently of each other. The company sells the screws in packages of 25 and offers a money-back guarantee that at most 1 of the 25 screws is defective. Using Poisson approximation for binomial distribution, the probability that the company must replace a package is approximately?Select one:a.0.01.b.0.1947.c.0.7788.d.0.0264.e.0.2211.

Question

It is known that screws produced by a certain company will be defective with probability .01 independently of each other. The company sells the screws in packages of 25 and offers a money-back guarantee that at most 1 of the 25 screws is defective. Using Poisson approximation for binomial distribution, the probability that the company must replace a package is approximately?Select one:a.0.01.b.0.1947.c.0.7788.d.0.0264.e.0.2211.

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Solution

To solve this problem, we first need to understand that the Poisson distribution is a good approximation of the binomial distribution when the number of trials is large and the probability of success is small.

In this case, the number of trials is 25 (the number of screws in a package) and the probability of a screw being defective is 0.01.

The parameter λ (lambda) for the Poisson distribution is the expected number of successes, which is the product of the number of trials and the probability of success. So, λ = 25 * 0.01 = 0.25.

The company will have to replace a package if there are 2 or more defective screws. So, we need to find the probability of having 0, 1 or 2 defective screws and subtract this from 1 to find the probability of having 2 or more defective screws.

The probability mass function of the Poisson distribution is P(X=k) = λ^k * e^-λ / k!, where k is the number of successes, e is the base of the natural logarithm (approximately 2.71828), and k! is the factorial of k.

So, P(X=0) = 0.25^0 * e^-0.25 / 0! = e^-0.25 ≈ 0.7788. P(X=1) = 0.25^1 * e^-0.25 / 1! = 0.25 * e^-0.25 ≈ 0.1947. P(X=2) = 0.25^2 * e^-0.25 / 2! = 0.0625 * e^-0.25 / 2 ≈ 0.0264.

The probability that the company must replace a package is 1 - P(X=0) - P(X=1) - P(X=2) ≈ 1 - 0.7788 - 0.1947 - 0.0264 ≈ 0.

So, the closest answer is (a) 0.01.

This problem has been solved

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