Total (100 percent) inspection is justified when the cost of a loss incurred by not inspecting is

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Total (100 percent) inspection is justified when the cost of a loss incurred by not inspecting is greater than the cost of inspection. For example, suppose a faulty item results in a $10 loss and the average per- centage defective of items in the lot is 3 percent.

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Operations Management For Competitive Advantage

ISBN: 1572

11th Edition

Authors: Richard B. Chase, F. Robert Jacobs

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