There is a 4 percent error at a specific point in a production process. If an inspector is placed at this point, all the defects can be detected and eliminated. The inspector would cost $8 per hour and could inspect unit in the process at the current production rate of 45 per hour. If no inspector is hired and defects are allowed to pass a point, there is a cost of $9 per defective unit to correct the defects later. If an inspector is hired, what will be the inspection cost per unit? (Round to 3 decimal places.) If an inspector is hired, what will be the defective cost per unit? (Round to 3 decimal places.) Should an inspector be hired based on cost alone?
There is a 4 percent error at a specific point in a production process. If an inspector is placed at this point, all the defects can be detected and eliminated. The inspector would cost $8 per hour and could inspect unit in the process at the current production rate of 45 per hour. If no inspector is hired and defects are allowed to pass a point, there is a cost of $9 per defective unit to correct the defects later. If an inspector is hired, what will be the inspection cost per unit? (Round to 3 decimal places.) If an inspector is hired, what will be the defective cost per unit? (Round to 3 decimal places.) Should an inspector be hired based on cost alone?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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There is a 4 percent error at a specific point in a production process. If an inspector is placed at this point, all the defects can be detected and eliminated. The inspector would cost $8 per hour and could inspect unit in the process at the current production rate of 45 per hour.
If no inspector is hired and defects are allowed to pass a point, there is a cost of $9 per defective unit to correct the defects later.
- If an inspector is hired, what will be the inspection cost per unit? (Round to 3 decimal places.)
- If an inspector is hired, what will be the defective cost per unit? (Round to 3 decimal places.)
- Should an inspector be hired based on cost alone?
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