Homework Help (WK5)

# Homework Help (WK5) - test all units? Yes, for it is...

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Week 5 Help CH9A, Pg 216, P4 John, I got the same answer as you. .. I am pretty sure that your answer is "GTG". Output from a process contains 0.02 defective units. Defective units that go undetected into final assemblies cost \$25 each to replace. An inspection process, which would detect and remove all defectives, can be established to test these units. However, the inspector, who can test 20 units per hour, is paid \$8 per hour, including fringe benefits. Should an inspection station be established to
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Unformatted text preview: test all units? Yes, for it is cheaper to inspect. ( a) What is the cost to inspect each unit? \$8 / 20 = \$.40 Calculation Cost per hour No inspection .02(20)\$25 \$10 Inspection 8 (b) What is the benefit (or loss) from the inspection process? Benefit Average cost of quality – cost of inspection = (.02)\$25 - \$.40 = \$.10...
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## This note was uploaded on 08/24/2011 for the course MGMT 375 taught by Professor Martinbrennan during the Summer '10 term at Park.

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