(Answered) : Output Process Contains 004 Proportion Defective Units Defective Units Go Undetected Final Q32729863

Output from a process contains 0.04 proportion of defectiveunits. Defective units that go undetected into final assembliescost $20 each to replace. An inspection process, which would detectand remove all defectives, can be established to test these units.The inspector, who can test 21 units per hour (which matches thecurrent production rate), would be paid $8 per hour, includingfringe benefits.

Assume that the line will operate at the same rate (i.e., thecurrent production rate) regardless of whether or not theinspection operation is added.

a-1. Without the inspector, what is the currenthourly cost of defects? (Round your answer to 2 decimalplaces.)

Cost per hour           $

a-2. Should an