Passage Summary: An investigator found that 20 percent of the samples they tested were broken. Because the contract says only 5 percent can be broken, they concluded the company is breaking the rules.

Conclusion: The supplier has breached their contract regarding the maximum allowable defect rate.

Reasoning: A lab test of specific samples sent by field inspectors showed a 20 percent defect rate, which is much higher than the 5 percent limit allowed in the contract.

Analysis: The flaw here is a classic sampling error. The investigator is assuming that the samples sent by field inspectors are representative of the entire production run. If inspectors specifically look for and send back items they suspect are broken, a 20 percent defect rate in those samples doesn't mean the overall defect rate is over 5 percent. Look for an answer that points out the samples might not be a fair representation of all the products manufactured.