A quality control procedure involves 100% inspection of parts received from a supplier. Historical records show the following defective rates have been observed. Percent Defective Probability 0 0.10 1 0.20 2 0.45 3 0.25 The cost for the quality control 100% inspection is $325 for each shipment of 600 parts. If the shipment is not 100% inspected, defective parts will cause rework problems later in the production process. The rework cost is $30 for each defective part. Construct a payoff table for this problem. The plant manager is considering eliminating the inspection process in order to save the inspection cost per shipment. Do you support this action? Why?
A quality control procedure involves 100% inspection of parts received from a supplier. Historical records show the following defective rates have been observed.
Percent Defective Probability
0 0.10
1 0.20
2 0.45
3 0.25
The cost for the quality control 100% inspection is $325 for each shipment of 600 parts. If the shipment is not 100% inspected, defective parts will cause rework problems later in the production process. The rework cost is $30 for each defective part.
- Construct a payoff table for this problem.
- The plant manager is considering eliminating the inspection process in order to save the inspection cost per shipment. Do you support this action? Why?
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