The Quality Manager for Microelectronics,Inc

question 38

Multiple Choice

The Quality Manager for Microelectronics,Inc.is concerned about the quality of the batch of several thousand IC's (integrated circuits) which his company is about to ship.If the cost of replacing a defective IC once it has been shipped is $5.00,while the cost of complete (100%) inspection prior to shipment is $.20 each,at what point is he indifferent between complete inspection or shipment without inspection?

• A)0% defectives
• B)4% defectives
• C)5% defectives
• D)9% defectives
• E)22% defectives

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Definitions:

MRP

Marginal Revenue Product, representing the additional revenue generated by employing one more unit of a factor, such as labor or capital.

Rent

Rent is the payment made by a tenant to a landlord for the use of a property, room, or piece of land for a specified period.

Marginal Revenue Product

The additional revenue a firm generates from employing one more unit of input, such as labor or capital.

Wage Rate

The standard amount of pay given for work performed, typically expressed in terms of pay per hour or pay per unit of work done.