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Chapter 2: Q13-4OQ (page 339)

Question:There is a 3 percent error rate at a specific point in a production process. If an inspector is placed at this point, all the errors can be detected and eliminated. However, the inspector is paid \(8 per hour and can inspect units in the process at the rate of 30 per hour. If no inspector is used and defects are allowed to pass this point, there is a cost of \)10 per unit to correct the defect later on. Should an inspector be hired?

Short Answer

Expert verified

Answer

Yes, the investigator should be hired

Step by step solution

01

Step-by-Step Solution Step 1: The inspectors are hired

Theexternal inspectorsare hired to detect the error in the production process. The production process involves the entire steps that are necessary to form an end product for the consumer. And if there is any defect in the process, then it needs to be solved immediately so that it will not affect in future.

02

An inspector be hired

Yes, the inspector should be hired because,

Defective average = 0.03

Inspection rate = 30 per hour

Cost of inspection = $8 per hour

Correction cost is $10 each

Chance of no inspection =930=0.300

localid="1650519971358" Inspector=830=2.67

Yes, there is a need for investors.

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Question:In the past, Alpha Corporation has not performed incoming quality control inspections but has taken the word of its vendors. However, Alpha has been having some unsatisfactory experiences recently with the quality of purchased items and wants to set up sampling plans for the receiving department to use. For a particular component, X, Alpha has a lot of tolerance percentage defective of 10 percent. Zenon Corporation, from which Alpha purchases this component, has an acceptable quality level in its production facility of 3 percent for component X. Alpha has a consumer鈥檚 risk of 10 percent and Zenon has a producer鈥檚 risk of 5 percent.

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