The optimum level of inspection is where the:
A) cost of inspection is minimum.
B) cost of passing defectives is minimum.
C) total cost of inspection and defectives is maximum.
D) total cost of inspection and defectives is minimum.
E) difference between inspection and defectives costs is minimum.

Question

Quizplus · Accepted Answer

The optimum level of inspection is where the total cost of inspection and defectives is minimum. This is because at this level, the cost of inspection is balanced with the cost of passing defectives. Any increase in inspection beyond this level would result in a higher cost of inspection, while any decrease in inspection would result in a higher cost of passing defectives. Therefore, the optimum level is where the total cost (both inspection and defectives) is at its minimum.

The Optimum Level of Inspection Is Where The