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

1

0.990

2

0.990

3

0.980

4

0.995

5

0.965

6

0.985

7

0.995

The assembler purchases 6000 units of each component and inspects the products after production. The total direct cost of final products is $600 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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