1 2 A production process generates a stable average defect rate of 3.5% defective (Each unit produced is defective with probability p = 0.035) (Each unit produced is 'good' with probability 1-0 = 0.965) 3 4 5 The cost to inspect a unit is $4.25 per unit The external failure cost (if a defective unit is sold) is $60 per unit 6 On an expected cost basis, does it make sense to inspect the output of this process prior to selling it? SHOW YOUR WORK