What inspection policy should be used

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The initial inspection of transmission systems in automobiles is estimated to cost $0.50 per unit. If a nonconforming transmission is allowed in the assembly, the unit cost to eventually disassemble and replace it is $225.

The estimated proportion nonconforming of the transmission systems is 0.003. Using Deming's kp rule, what inspection policy should be used?

Reference no: EM131389978

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