Question: Two inspection alternatives are to be compared for a processing sequence consisting of 5 operations performed on a batch of 200 starting parts: (1) one

Two inspection alternatives are to be compared for a processing sequence consisting of 5 operations performed on a batch of 200 starting parts: (1) one final inspection and sortation operation following the last operation, and (2) distributed inspection with an inspection and sortation after each operation. The cost of each processing operation Cpr = $0.80 per unit processed. The fraction defect rate at each operation = 0.02. The cost of the single final inspection and sortation in alternative (1) is Csf = $2.50 per unit. The cost of each inspection and sortation in alternative (2) is Cs = $0.15 per unit. Compare total processing and inspection costs per batch for the two cases and state which option is less expensive.

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