Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company currently using an inspection process in its material receiving department is trying to install an overall cost reduction program. One possible reduction is

A company currently using an inspection process in its material receiving department is trying to install an overall cost reduction program. One possible reduction is the elimination of one inspection position. This position tests material that has a defective content on the average of 0.04. By inspecting all items, the inspector is able to remove all defects. The inspector can inspect 46 units per hour. The hourly rate including fringe benefits for this position is $9. If the inspection position is eliminated, defects will go into product assembly and will have to be replaced later at a cost of $10 each when they are detected in final product testing.
Assume that the line will operate at the same rate (i.e., the inspection rate) if the inspection operation was eliminated.
a-1. If the inspector position is eliminated, what will the hourly cost of defects be?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Property Management

Authors: Mr. Aaron Felix Villaver Paril, Mr. Ariel Reyes Sudario

1st Edition

9798652748937

More Books

Students also viewed these General Management questions