In Example 16.6-1, suppose that the labor cost for machines I and II is $20 per hour and that for inspection is only $18 per hour. Further assume that it takes 30 minutes and 20 minutes to process a piece on machines I and II, respectively. The inspection time at each of the two stations is 10 minutes. Determine the labor cost associated with a completed (good) piece.

Example 16.6-1
A product is processed on two sequential machines, I and II. Inspection takes place after a product unit is completed on either machine. There is a 5% chance that the unit will be junked before inspection. After inspection, there is a 3% chance the unit will be junked, and a 7% chance of being returned to the same machine for reworking. Else, a unit passing inspection on both machines is good.