PROBLEM 1: 1. As an Engineer, you are asked to improve the quality problem of the operation. A total budget of $300,000 will be used to resolve the quality issue high percentages of defective items delivered to customers. The following data have been collected: 1. The average yield rate for the current production process is on average 70%. 2. Current inspection accuracy is 90%, i.e., for 100 defective products, 90 will be successfully identified and scraped; 10 defective items will be missed by the inspection station. (Note: good items will not be falsely identified as defective items.) 3. Through training programs, the inspection accuracy can be improved to 95%. Such training program will cost the company a total of $100,000. Inspection accuracy can not be improved beyond 95% due to the limitation of using visual inspection. 4. Through acquisition of new equipment for the production department, the yield of the process can be improved. There are three alternatives machine models: Machine 1: capital investment of $300,000., the process yield can be improved to 90%. Machine 2: capital investment of $200,000., the process yield can be improved to 85%. Machine 3: capital investment of $100,000., the process yield can be improved to 80%. The management has set a target that no more than 1% of defective items can be found in orders delivered to the customers. What will be your proposal in terms of meeting this target? (Hint: based on the budget, you can calculate the output quality by purchasing one of the 3 machine models first. If there is still budget left, the fund can be used to improve the inspection accuracy (cost $100,000))