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Output from a process contains 0.02 defective unit. 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 22 units per hour, is paid $10 per hour, including fringe benefits. Should an inspection station be established to test all units? Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether or not the inspection operation is added. a-1. Without the inspector, what is the current hourly cost of defects? (Round your answer to 2 decimal places.) Cost per hour a-2. Should an inspection station be established to test all units based on costs alone? O Yes O No a-3. If the inspection operation is added, what would be the cost to inspect each unit? (Round your answer to 2 decimal places.) Cost to inspect per unit b. What would be the benefit (or loss) from establishing the inspection process? (Input the amount as a positive value. Round your answer to 2 decimal places.) per unit

Output from a process contains 0.02 defective unit. 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 22 units per hour, is paid $10 per hour, including fringe benefits. Should an inspection station be established to test all units? Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether or not the inspection operation is added. a-1. Without the inspector, what is the current hourly cost of defects? (Round your answer to 2 decimal places.) Cost per hour a-2. Should an inspection station be established to test all units based on costs alone? O Yes O No a-3. If the inspection operation is added, what would be the cost to inspect each unit? (Round your answer to 2 decimal places.) Cost to inspect per unit b. What would be the benefit (or loss) from establishing the inspection process? (Input the amount as a positive value. Round your answer to 2 decimal places.) per unit

Practical Management Science
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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Output from a process contains 0.02 defective unit. 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 22 units per hour, is paid $10 per hour, including fringe benefits. Should an inspection station be established to test all units? Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether or not the inspection operation is added. a-1. Without the inspector, what is the current hourly cost of defects? (Round your answer to 2 decimal places.) Cost per hour a-2. Should an inspection station be established to test all units based on costs alone? O Yes O No a-3. If the inspection operation is added, what would be the cost to inspect each unit? (Round your answer to 2 decimal places.) Cost to inspect per unit b. What would be the benefit (or loss) from establishing the inspection process? (Input the amount as a positive value. Round your answer to 2 decimal places.) per unit
Transcribed Image Text:Output from a process contains 0.02 defective unit. 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 22 units per hour, is paid $10 per hour, including fringe benefits. Should an inspection station be established to test all units? Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether or not the inspection operation is added. a-1. Without the inspector, what is the current hourly cost of defects? (Round your answer to 2 decimal places.) Cost per hour a-2. Should an inspection station be established to test all units based on costs alone? O Yes O No a-3. If the inspection operation is added, what would be the cost to inspect each unit? (Round your answer to 2 decimal places.) Cost to inspect per unit b. What would be the benefit (or loss) from establishing the inspection process? (Input the amount as a positive value. Round your answer to 2 decimal places.) per unit
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