Question: An assembler uses seven key components in its final product. These components are purchased from different suppliers. Historical data shows that the reliabilities of the

An assembler uses seven key components in its final product. These components are purchased
from different suppliers. Historical data shows that the reliabilities of the purchased components
are as follows:
Component Reliability
10.990
20.990
30.980
40.995
50.965
60.985
70.995
The assembler purchases 2000 units and inspects the products after production. The total direct
cost of final products is $500 per unit. After inspection, 30% of the defective items can be fixed
and on average the rework cost is $50 per unit. Calculate the actual unit cost considering the
reliability.

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