Consider the production process for manufacturing widgets. The first step in the process is Task A which can produce 80% good products. Among the defective products, 60% can be salvaged by reworking on them. The rest of the products are discarded. Both the good and reworked widgets go through Task B which can produce 85% good products. The manufacturing cost for task A is estimated to be $50 per widget. The cost of reworking on the widgets is $25 per widget. Finally, the manufacturing cost of Task B is $35 per widget.
1. How many units should you start with to get a yield of 1000 units?
a. 1177
b. 1280
c. 1228
d. 1000
e. 1340
2. What is the total manufacturing cost, assuming that you are producing a yield target of 1,000 units?
a. $129,360
b. $88,000
c. $109,000
d. $103,488
e. $112,000