Reference no: EM131119412
In the production of a part for a printer, four sequential operations are involved. Unit processing costs for the operations are $10, $6, $15, and $20, respectively. The first pass yield for each operation is 0.95, 0.90, 0.95, and 0.85, respectively. Unit inspection costs after each operation are $0.50, $2.00, $3.00, and $5.00, respectively.
a) If no inspection is performed, what is the unit cost for an acceptable part?
b) Assume that an inspection process is able to identify all parts correctly. Suppose that inspection is conducted only after the first and second operations. Nonconforming parts are not forwarded to the next operation. What is the unit cost per acceptable part?
c) Suppose that inspection is conducted only after the third operation. Nonconforming parts are not forwarded to the next operation. What is the unit cost per acceptable part?
d) Based on the units costs computed in parts (b) and (c), discuss where, in general, inspections should be conducted.
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