Use the binomial theorem
where n = 24, p= 96/100 (96% = 1 - 4%), k=24 (the entire shipment!)
Q: A company purchases shipments of machine components and uses this acceptance sampling plan: Randomly select and test 24 components and accept the whole batch if there are fewer than 3 defectives. If a particular shipment of thousands of components actually has a 4% rate of defects, what is the probability that this whole shipment will be accepted?
A: 0.9307
I'm not sure how to set up the equation to solve it. Any help is appreciated.