Question: Q 5 . A processing sequence consists of 1 6 operations, each of which is followed by an inspection and sortation operation to detect and

Q5. A processing sequence consists of 16 operations, each of which is followed by an inspection
and sortation operation to detect and remove defects generated in the processing operation.
Defects in each process occur at a rate of q =0.02. Each processing operation costs $2.50 per
unit processed, and the inspection/sortation operation costs $0.15 per unit. Batch size is 25,000.
(a) Determine the total processing and inspection costs for this distributed inspection system. (b)
A proposal is being considered to combine all of the inspections into one final inspection and
sortation station following the last processing operation. Determine the cost per unit of this final
inspection and sortation station that would make the total cost of this system equal to that of the
distributed inspection system.

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