Production process-what is the expected profit per unit

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A production process at Firsten Last, Inc. has two in-line stages. The probability of defects occurring ini stage 1 is 30%. If there is a defect at stage 1, there is a 90% chance of defect at stage 2. If there is no defect at stage 1, the probability of a defect at stage 2 is 20%. Finished units that only have a stage 1 defect can be repaired at a cost of $7. A stage 2 only defect costs $11 to repair. Items with a stage 1 and a stage 2 defect must be scrapped at a cost of $2 each. It costs $18 to manufacture and $5 to test each unity. The shipping cost is $3 per unit. They sell for $50 each. a) what percentage of finished units will have the folloiwng attributes? i.) no defects, ii.) a stage 1 defect only iii.) a stage 2 defect only, and iv.) a stage 1 and a stage 2 defect b) what is the expected profit per unit?

Reference no: EM132122618

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