The average outgoing quality level represents the relationship between the quality of the incoming material and the quality of the outgoing material, assuming that rejected lots will be 100% inspected and all defective items will be replaced or reworked.

When the incoming quality is very good or very bad, the outgoing quality is usually good because of the sorting and reworking of the bad parts so they don't get through the process. When the incoming quality is mediocre, the outgoing quality gets worse and the % defective reaches a maximum known as the average outgoing quality limit (AOQL).

For the grocery bags, when the average incoming quality level is 2%, the average outgoing quality is 1.885% defective. When the average incoming quality level is 5%, the average outgoing quality is 0.488% defective. The incoming quality is worse than the outgoing quality because rejected lots will be replaced with lots containing 0% defective units.

The worst average outgoing defect level (AOQL) of 2.114% is seen when the incoming quality level is 2.632% defective.