Problem $13-3($Algo$)$

Output from a process contains $0\mathrm{.}05$ defective unit. Defective units that go undetected into final assemblies cost $$20$ each to replace.

An inspection process, which would detect and remove all defectives, can be established to test these units. However, the inspector,

who can test $25$ units per hour, is paid $$7$ per hour, including fringe benefits.

Assume that the line will operate at the same rate $($i$.$e$.,$ the current production rate$)$ regardless of whether or not the inspection

operation is added.

a$-1.$ Without the inspector, what is the current hourly cost of defects?

Note: Round your answer to $2$ decimal places.

a$-2.$ Should an inspection station be established to test all units based on costs alone?

Yes

No

a$-3.$ If the inspection operation is added, what would be the cost to inspect each unit?

Note: Round your answer to $2$ decimal places.

b$.$ What would be the benefit $($or loss$)$ from establishing the inspection process?

Note: Input the amount as a positive value. Round your answer to $2$ decimal places.