Should management investigate the process why or why not

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Variance investigation. X-Game Company's production manager is considering whether to investigate a computer-integrated manufacturing process. The investigation costs $7,000. If the manager finds that the process is out of control, correcting it costs $20,000. If the process is out of control and is corrected, the company saves $45,000 until the next scheduled investigation. The probability of the process being in control is 0.65, and the probability of the process being out of control is .35, given recent variance reports.

Should management investigate the process? Why or why not?

Reference no: EM13903137

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