Question

OPERATIONS MANAGEMENT

Jane is in charge of manufacturing lumber. The saw blade that cuts the lumber is 1/4 inches wide +/- 0.001 inches. Jane notices from her run chart that the lumber she produces varies between 0.249 inches to 0.251 inches. John tells Jane that she needs to change the saw blade because it is NOT cutting within the process parameters. If Jane changes out the blade this will be an example of:

Select one or more:

a. TYPE TWO ERROR
b. TYPE FIVE ERROR
c. TYPE FOUR ERROR
d. John is CORRECT. Therefore there is NO ERROR
e. TYPE ONE ERROR

OPERATIONS MANAGEMENT

Answer 1

The given is an example for Type I error as this kind of error is also known as Producer’s risks. In the given scenario both John and Jane are from production side, and they were able to find out the issue during the production itself, before it reaches to the end customer. If this issue is not resolved during production there is a high chance that the customer will complain about the product and that way it will increase chances for Type II errors (Consumer’s risk).

Type I and Type II errors can be defined in terms of hypothesis testing.

• A Type I error () is the probability of rejecting a true null hypothesis.
• A Type II error () is the probability of failing to reject a false null hypothesis.

  Or simply:

• A Type I error () is the probability of telling you things are wrong, given that things are correct.
• A Type II error () is the probability of telling you things are correct, given that things are wrong.