Charles a quality inspector for queen washers is concerned


Charles, a Quality Inspector for Queen Washers, is concerned about the quality of a batch of several thousand items that his company will be receiving next week. Queen Washers manufactures washers for laundromats and is expecting a shipment of drive motors, an important component of the washer. Charles decides to first conduct a break-even analysis to see which inspection approach might be most appropriate from a cost perspective—no inspection, sampling, or full inspection. Charles assumes that the number of defective items in each batch is a random variable. Accordingly, if the cost of replacing a defective drive motor once it has been assembled is $51 and the cost of inspecting items in the incoming shipment is $2 each, below what estimated proportion of defectives in the batch would Charles prefer to use a sampling methodology instead of 100% inspection? 3.5% defective 2.2% defective 3.9% defective 5.1% defective.

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