# Question: Your quality control manager has identified the four major problems

Your quality control manager has identified the four major problems, the extent to which each one occurs (i.e., the probability that this problem occurs per item produced), and the cost of reworking to fix each one (see Table 7.6.5). Assume that only one problem can occur at a time.

a. Compute the expected rework cost for each problem separately. For example, the expected rework cost for “broken case” is 0.04 × 6.88. Compare the results and indicate the most serious problem in terms of expected dollar costs.

b. Find the overall expected rework cost due to all four problems together.

c. Find the standard deviation of rework cost (don’t forget the nonreworked items).

d. Write a brief memo, as if to your supervisor, describing and analyzing the situation.

a. Compute the expected rework cost for each problem separately. For example, the expected rework cost for “broken case” is 0.04 × 6.88. Compare the results and indicate the most serious problem in terms of expected dollar costs.

b. Find the overall expected rework cost due to all four problems together.

c. Find the standard deviation of rework cost (don’t forget the nonreworked items).

d. Write a brief memo, as if to your supervisor, describing and analyzing the situation.

**View Solution:**## Answer to relevant Questions

Suppose that 8% of the loans you authorize as vice president of the consumer loan division of a neighborhood bank will never be repaid. Assume further that you authorized 284 loans last year and that loans go sour ...Your firm has decided to interview a random sample of 10 customers in order to determine whether or not to change a consumer product. Your main competitor has already done a similar but much larger study and has concluded ...A union strike vote is scheduled tomorrow, and it looks close. Assume that the number of votes to strike follows a binomial distribution. You expect 300 people to vote, and you have projected a probability of 0.53 that a ...In order to earn enough to pay your firm’s debt this year, you will need to be awarded at least 2 contracts. This is not usually a problem, since the yearly average is 5.1 contracts. You may assume a Poisson ...You have a position open and are trying to hire a new person. Assume that the new person’s experience will follow a normal distribution with the mean and (sample) standard deviation of your current employees. a. Find the ...Post your question