Question: There is a 3.5 percent error rate at a specific point in a production process. If an inspector is placed at this point, all the

There is a 3.5 percent error rate at a specific point in a production process. If an inspector is placed at this point, all the errors can be detected and eliminated. However, the inspector is paid $8 per hour and can inspect units in the process at the rate of 32 per hour.If no inspector is used and defects are allowed to pass this point, there is a cost of $9 per unit to correct the defect later on.

a. What is the cost to inspect each unit?

b. Is there benefit (or loss) from the current inspection process? How much?

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