Management is trying to decide whether to inspect Part A or not. If 100% of Part A is inspected, the defective rate will go down by two percent (from 6% without inspection to 4% after inspection). The cost of inspection is $0.02 per unit. If Part A is not inspected, then the defectives will go through to the product assembly phase and have to be replaced later at a cost of $4.00. Select the options below that encapsulates the advice you would give Management.

Yes, the expected benefit from inspection is more than the expected cost of inspection.

No, the expected benefit from inspection is less than the expected cost of inspection.

Management should try to get the Part A supplier to improve its quality and reduce its defect rate by 1% in exchange for a unit cost increase of $0.03 per unit.

Insufficient economic data is provided to determine if Part A inspection should be recommended or not.

Management should try to get the Part A supplier to improve its quality and reduce its defect rate by at least 1% for a unit cost increase of less than $0.02 per unit