CAPACITORINSPRELPROBF V) 20 PTS FELSON ELECTRICAL EQUTPMENT MANUFACTURER PRODUCE

Question

CAPACITORINSPRELPROBF V) 20 PTS FELSON ELECTRICAL EQUTPMENT MANUFACTURER PRODUCES CAPAC- ITORS FOR IN BATCHES OF 225. THE QUA ANY HAS FOUND THAT 12% OF CAPACITORS IN EACH BATCH ARE DEFEC TIVE. THE REPAIR AND/OR REPLACEMENT OF DEFECTIVE CAPACITORS IS $300 EACH, THE Q.?. (QUALITY CONTROL) MANAGER IS CONSTD- ERING A NUMBER OF POSSIBLE MODIFICATIONS TO EXISTING OPERAT- IONS IN ORDER TO REDUCE THE COST OF DEFECTIVE CAPACITORS IN EACH BATCH OF CAPACITORS. THESE OPTIONS ALL INVOLVE SOME THE CAPACTORSARE-PRODUCED LITY CONTROL MANAGER OF THE COMP- USE IN POWER-LINES; SORT OF INSPECTION PROCESS AND ARE LISTED BELOW: OPTION A: INSPECT EACH CAPACITOR AT A COST OF $20 EACH WITH THE PERCENT DEFECTIVE REDUCED TO ONLY 10% OPTION B: INSPECT EACH CAPACITOR AT A COST OF $30 EACH WITH A PERCENT DEFECTIVE REDUCED TO ONLY 8%. OPTION C. INSPECT EACH CAPAC?TORATA COST OF $40 EACH WITH A PERCENT DEFECTIVE REDUCED TO ONLY 6%. 4 PTS. 1) WHAT IS THE CURRENT EXPECTED COST PER BATCH FOR CAPACITOR REPLACEMENT? ANPTSEP2CENENIS THE PXTOTED COST PER BATCH FOR INSPECTION AND REPLACEMENT WITH OPTION A? 4 PTS. 3) WHAT IS THE EXPECTED COST PER BATCH FOR INSPECTION AND REPLACEMENT WITH OPTION B? 4 PTS ) HAT IS THE EXPECTED CT PR BATCH FOR INSPECTION 4 PTS, 5)ADVISE THE Q.C. MANAGER AS TO WHICH (IF ANY) OF THE OPTIONS TO SELECT, DETERMINE THE EXPECTED COST FOR EACH BATCH UNDER EACH OF THESE POLICIES, OR OPTIONS: ALSO INDICATE THE COST PER BATCH WITH YOUR CHOICE. REMEMBER THAT YOU WISH TO CHOOSE THAT OPTION WHICH MINIMIZES COST !! !!! ALSO, ONE OF R TS TO CONTINUE THE CURRENT OPERATION WITHOUT ANY page 1

Explanation / Answer

= Percentage of defective items x Batch sizex replacement cost per capacitor

= 12% of 225 x $300

= $8100

Expected cost of capacitor replacement per batch

= 10% of 225 x 300

= $ 6750

Expected cost per batch for inspection and replacement with option A

= $4500 + $6750

= $11250

Expected cost of capacitor replacement per batch

= 8% of 225 x 300

= $ 5400

Expected cost per batch for inspection and replacement with option B

= $6750 + $5400

= $12150

Expected cost of capacitor replacement per batch

= 6% of 225 x 300

= $ 4050

Expected cost per batch for inspection and replacement with option C

= $9000 +$4050

= $13050

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