A company currently using an inspection process in its material receiving department is trying to reduce costs. One possible reduction is to eliminate the inspection position. This position tests material that has , on average , a 10 percent defective rate. By inspection , the inspector is able to remove all defective items. The inspector can inspect 60 units per hour. The inspector's hourly wage , which includes fringe benefits , is $ 18 per hour If the inspection position is eliminated , defects will go into the final product. When the product does not work during the final product testing it will cost the company 4 to repair the product.

Questions : 1. If 60 units were inspected , what would it cost ?

2. If 60 units were not inspected and defects were repaired later , what would it cost ?

3. Therefore , which option ( to inspect , or to not inspect ) would be cheaper ?