A company is reviewing its policy of putting each sub-assembly bought in from outside through a detailed inspection process on delivery. The firm can either inspect or not inspect. The sub-assembly may either come up to the required quality standard (90 % of the time), or fail to do so (10 % of the time). It costs K10 to inspect a sub-assembly and another K10 to put right any defect found at that stage. If the sub-assembly is not inspected Page 4 of and is then found to be faulty at the finished goods stage the cost of rework is K40. Advise the firm what to do.
A company is reviewing its policy of putting each sub-assembly bought in from outside through a detailed inspection process on delivery. The firm can either inspect or not inspect. The sub-assembly may either come up to the required quality standard (90 % of the time), or fail to do so (10 % of the time). It costs K10 to inspect a sub-assembly and another K10 to put right any defect found at that stage. If the sub-assembly is not inspected Page 4 of and is then found to be faulty at the finished goods stage the cost of rework is K40. Advise the firm what to do.
Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
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Question
A company is reviewing its policy of putting each sub-assembly
bought in from outside through a detailed inspection process on
delivery. The firm can either inspect or not inspect. The sub-assembly
may either come up to the required quality standard (90 % of the
time), or fail to do so (10 % of the time).
It costs K10 to inspect a sub-assembly and another K10 to put right
any defect found at that stage. If the sub-assembly is not inspected
Page 4 of
and is then found to be faulty at the finished goods stage the cost of
rework is K40.
Advise the firm what to do.
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