Determine the average cost per piece for the two processes

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Question: Two different manufacturing processes, A and B, can be used to produce a certain component. The specification on the dimension of interest is 100.00 ±0.20 mm. The output of process A follows the normal distribution, with μ = 100.00 mm and σ = 0.10 mm. The output of process B is a uniform distribution defined by f(x) = 2.0 for 99.75 ≤× ≤100.25 mm. Production costs per piece for processes A and B are each $5.00. Inspection and sortation cost is 50.50/pc. If a part is found to be defective, it must be scrapped at a cost equal to twice its production cost. The Taguchi loss function for this component is given by L(x) = 2500(x - N)2, where x = value of the dimension and N is its nominal value. Determine the average cost per piece for the two processes.

Reference no: EM131453304

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