An automobile company gets its brake pads from a supplier in Mexico. They are sh

Question

An automobile company gets its brake pads from a supplier in Mexico. They are shipped over each evening in large trucks.   A shipment is considered good if 5% or fewer of the pads are bad. But it is not possible to test every pad. So for each shipment, the quality control manager randomly picks 100 brake pads and runs them through some tests. He accepts the shipment only if 7 or fewer pads are found to be bad.  

     If you are the supplier, which type of error would be more important to you and why?

Explanation / Answer

as I am the supplier, type I error would be more important to me. cause type I error is rejecting the material even it contails less then 5% of defective. Hence if that happens that would affect my revenue

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