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A Quality Inspector for Alpha-Beta Co

Question 21

Multiple Choice

A Quality Inspector for Alpha-Beta Co.is concerned about the quality of the batch of several thousand Gizmos which his company produced this week and is preparing to ship.If the cost of replacing a defective Gizmo once it has been shipped is $2.00,while the cost of 100% inspection prior to shipment is $.40 each,at what point is he indifferent between 100% inspection or shipment without inspection?


A) 0% defectives
B) 2% defectives
C) 5% defectives
D) 20% defectives
E) 30% defectives

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