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Producer Risk and Consumer Risk

The document discusses producer's risk and consumer's risk. Producer's risk refers to the probability that a lot will be rejected even though it meets quality standards, while consumer's risk is the probability that a defective lot will be accepted. Both the producer and consumer agree on an Acceptable Quality Level (AQL) or Lot Tolerance Percentage Defective (LTPD). Type I error, or producer's risk, is the probability of rejecting an acceptable lot. Type II error, or consumer's risk, is the probability of accepting a defective lot. Typical values for these error probabilities range from 0.2 to 0.01.

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Disha Shah
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5K views1 page

Producer Risk and Consumer Risk

The document discusses producer's risk and consumer's risk. Producer's risk refers to the probability that a lot will be rejected even though it meets quality standards, while consumer's risk is the probability that a defective lot will be accepted. Both the producer and consumer agree on an Acceptable Quality Level (AQL) or Lot Tolerance Percentage Defective (LTPD). Type I error, or producer's risk, is the probability of rejecting an acceptable lot. Type II error, or consumer's risk, is the probability of accepting a defective lot. Typical values for these error probabilities range from 0.2 to 0.01.

Uploaded by

Disha Shah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • Consumer's Risk
  • Producer's Risk

1.

Producer’s Risk

Sometimes it happen that inspite of good quality, the sample taken may show defective
units as such the lot will be rejected. Inspite of good quality the lot is rejected, such a type of
risk of rejection is known as producer’s risk. In other words, the probability of rejecting a lot
which has actually been satisfactory by the producer according to acceptable quality level is
known as producer’s risk. Thus, the risk of rejecting a lot of good items is known as
producer’s risk.

2. Consumer’s Risk

Sometimes it may happen that the quality of the lot is not good but the sample results show
good quality units as such the consumer has to accept a defective lot.Such a risk is known
as consumer’s risk.In other words,the probability of accepting a lot which has actually been
satisfactory by the consumer according to a predetermined standard is known as
consumer’s risk.

The consumer and producer both decide the acceptance standard of the lot. This is known
as Acceptance Quality Level (AQL) or Lot Tolerance Percentage Defective(LTPD).

 Type I Error (Producer's Risk): This is the probability, for a given


(n,c) sampling plan, of rejecting a lot that has a defect level equal to the AQL.
The producer suffers when this occurs, because a lot with acceptable quality
was rejected. The symbol α is commonly used for the Type I error and typical
values for α range from 0.2 to 0.01.
 Type II Error (Consumer's Risk): This is the probability, for a given
(n,c) sampling plan, of accepting a lot with a defect level equal to the LTPD.
The consumer suffers when this occurs, because a lot with unacceptable quality
was accepted. The symbol β is commonly used for the Type II error and typical
values range from 0.2 to 0.01

1. Producer’s Risk Sometimes it happen that inspite of good quality, the sample taken may show defective units as such the

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