Question: Suppose that the prevention cost function is as given in Exercise 1-21. However, the unit appraisal cost is $2, with the cost function being linear

Suppose that the prevention cost function is as given in Exercise 1-21. However, the unit appraisal cost is $2, with the cost function being linear in 1 - q, implying a decrease in appraisal costs as quality improves. Further, the rework and external failure cost functions are given by Cr = 5(1 - q)/q and Ce = 85(1 - q)/q, respectively. Construct the total cost function as a function of q and graph it for levels of q in the range 0.80 to 0.98. What is the desirable operational level of quality?

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