Each Unit of a Product Requires 5 Components

question 123

Multiple Choice

Each unit of a product requires 5 components.The average number of components is 5.50 due to component failure.Purchasing higher quality components can reduce the average number of components to 5 per unit.The cost per component is $450.Calculate the reduction in failure costs per unit due to purchasing higher quality components.

• A) $43
• B) $350
• C) $175
• D) $225
• E) $372

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Definitions:

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