1. A four-stage process must produce 500 units per day. Units progress in order (stage 1, then stage 2, stage 3, then stage 4). At each stage, a percentage of the units are defective, and a percentage of the defective units can be reworked. Those that cannot be reworked are scrapped. The table below shows the percent defective for each stage, the percentage of defective units that must be scrapped. In addition, the table gives the cost to process the unit at each stage, and then the cost of reworking a defective unit, and the cost of scrapping a unit. You can assume that a defective item is either reworked or scrapped, not both. % of defectives that must Stage Process Cost ($/unit) Cost to rework ($/unit) Cost to Scrap ($/unit) Defective (%) be scrapped 1 $20.00 $9.00 $2.00 4% 90% 2 $15.00 $12.00 $4.00 6% 25% 3 $23.00 4 $18.00 $6.00 $11.00 $6.00 3% 0% $8.00 5% 62% a) Sketch a diagram that indicates the exact quantity of units entering and exiting each stage, including the rework area in each stage (similar to the ones shown in the slides). b) Calculate the values in the blank cells below. Stage 4 Output Input 500.00 Qty Reworked Qty Scrapped Cost 3 2 1 Total Cost $ Cost per unit $ c) Use the info below and find the number of machines you need at each stage (including rework specialists) needed to get an output of 500 units from the overall system. Stage Machine/Worker Process Time (min/unit) Efficiency Reliability Min/Day Avail Qty Units Processed Qty of Machines/ Workers 1 MX-01 4.2 98% 89% 400 1R Rework Specialist 8.8 90% 90% 400 2 XL-15 6.1 91% 86% 400 2R Rework Specialist 16.2 93% 80% 400 3 XL-15 4.4 87% 85% 400 3R Rework Specialist 18.3 85% 80% 400 4 CC-05 7.1 90% 87% 400 4R Rework Specialist 11.1 88% 99% 400 Required d) Recalculate parts b and c (namely, average cost per unit, and number each type of machines required) assuming your plant was "perfect" with 0% defective, (so no rework or scrap), and the machines have 100% reliability and 100% efficiency at each stage. Are the differences in costs and machines required significant in your opinion? Comment.