Question: Suppose an engineer must choose among vendors 1, 2, and 3 to supply tubing for a new product. Vendor 1 charges $20 per tube, vendor 2 charges $19 per tube, and vendor 3 charges $18 per tube. Vendor 1 has implemented the six-step process-oriented quality assurance cycle (and corresponding tools) in Table 1.1. As a result, only one tube in a million from vendor 1 is nonconforming. Vendor 2 has just begun implementation of the six steps and is producing 10 % nonconforming tubes. Vendor 3 does not apply quality assurance methodology and has no idea what percent of its tubing is nonconforming. What is the price per conforming item for vendors 1, 2, and 3?
