A batch of 1000 parts has been produced and a decision is needed whether to 100% inspect the batch or not. Past history with this part suggests that the fraction defect rate is around 0.02. Inspection cost per part is $0.20. If the batch is passed on for subsequent processing, the damage cost for each defective unit in the batch is $8.00. Determine
(a) Batch cost for 100% inspection and
(b) Batch cost if no inspection is performed.
(c) What is the critical fraction defect value for deciding whether to inspect.