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We are sampling items from a large lot. If the number of defectives in the lot is 3% or less, the lot is considered "good". If the defectives exceed 8%, the lot is considered "bad". We want the producer risk (probability of rejecting a good lot) to be less than or equal to 9% and the consumer risk (probability of accepting a bad lot) to be less than or equal to 5%. We need to determine N and C, where N is the a minimal sample size, and C is the critical level of defectives such that, if the observed number of defectives in the sample is less than or equal to C, we accept the lot.