The Quality Manager for Widgets,Inc

Multiple Choice

The Quality Manager for Widgets,Inc.is concerned about the quality of the lot of several thousand widgets which his company produced this week and is now ready to ship.If the cost of replacing a defective widget once it has been shipped is $5.00,while the cost of complete (100%) inspection prior to shipment is 30 cents per widget,what is the point of indifference between complete inspection and shipment without inspection?

A) 1.67% defectives
B) 3% defectives
C) 5% defectives
D) 6% defectives
E) 16.7% defectives