Refer to given Exercise, Suppose that the monthly production is 3000 units. What is the average savings in total inspection costs per month when using the policy found from Deming's kp rule as opposed to no inspection?
Exercise
The initial inspection of transmission systems in automobiles is estimated to cost $0.50 per unit. If a nonconforming transmission is allowed in the assembly, the unit cost to eventually disassemble and replace it is $225. The estimated proportion nonconforming of the transmission systems is 0.003. Using Deming's kp rule, what inspection policy should be used?