Refer to Exercise 1. lf the monthly production is 2000 units, what is the average savings in total inspection costs when using Deming's kp rule as opposed to 100% inspection?
Exercise 1
In Exercise 2, if the initial inspection costs of the transmission systems is $1.00 per unit, what inspection policy should be followed using Deming's kp rule?
Exercise 2
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?