The Quality Manager for Frozen Pizzas, Inc

question 20

Multiple Choice

The quality manager for Frozen Pizzas, Inc., is concerned about the quality of the lot of several thousand pizzas which his company produced this week, and is now ready to ship. If the cost of replacing a defective pizza once it has been shipped is $5.00, while the cost of complete (100 percent) inspection prior to shipment is $.30 per pizza, what is the point of indifference between complete inspection and shipment without inspection?

• A) 1.67 percent defectives
• B) 3 percent defectives
• C) 5 percent defectives
• D) 6 percent defectives
• E) 16.7 percent defectives

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Definitions:

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An educational institution specializing in legal studies, typically offering professional degrees in law.

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The knowledge or skill obtained from involvement in or exposure to events or activities over a period.

Average Salary

The mean income calculated by dividing the total salary of a group by the number of individuals in that group.

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A term describing something that has become larger or greater in size, amount, or degree.