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Net effect was to achieve close to zero defect state

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Inspection time for a plant is 16,000 hours per year. The cost of inspection consists of salaries of eight inspectors, totaling $320,000. Inspection also uses supplies costing $5 per inspection hour. The company eliminated most defective components by eliminating low-quality suppliers. The number of production errors was reduced dramatically by installing a system of statistical process control. Further quality improvements were realized by redesigning the products, making them easier to manufacture. The net effect was to achieve a close to zero defect state and eliminate the need for any inspection activity.

Reference no: EM133399922

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