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If the Cost of Replacing a Defective DVD Disk Once

Question 27

Multiple Choice

If the cost of replacing a defective DVD disk 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 and shipment without inspection?


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

Correct Answer:

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