Question: Module 3 Chp 21 - Q13 . A batch of 900 parts has been produced and a decision is needed whether or not to 100%

Module 3 Chp 21 - Q13

A batch of 900 parts has been produced and a decision is needed whether or not to 100% inspect the batch. Past history with this part suggests that the fraction defect rate is around 0.03. Inspection cost per part is $0.20. If the batch is passed on for subsequent processing, the damage cost for each defective unit in the batch is $10.00.

Given the data from above, sampling inspection is being considered as an alternative to 100% inspection. The sampling plan calls for a sample of 30 parts to be drawn at random from the batch. Based on the operating characteristic curve for this sampling plan, the probability of accepting the batch is 96% at the given defect rate of q = 0.03. Determine the batch cost for sampling inspection.

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