Construct a table showing the marginal failure reduction

Reference no: EM131136081

A. Construct a table showing the marginal failure reduction (in units) and the dollar value of these reductions for each inspector hired.

Answer:

Number of quality control inspectors

Thermostat Failure rate (%)

Marginal failure reduction (units)

Dollar value of reduction/hired insp

5.0

4.0

3.2

2.6

2.2

2.0

6.4

7.8

8.8

B. How many inspectors should the firm hire?

Answer:

C. How many inspectors should be hired if additional indirect cost (lost goodwill and so on) were to average 30 percent of direct replacement or repair costs?

Reference no: EM131136081

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