Inspection/sampling economics

stm08007

Starting to get Involved
#1
Hello!

I'm studying for the CQE and I've come across something else in the primer that isn't quite clicking. See the first equation in the attached picture.

I don't really understand the difference between variables B and C and then how they logically fit in the equation-

Cost per sampling* max samples makes sense, but why then would you add to it "cost per inspection unit* average samples"?

So if you had 30 samples from a 500 PC lot and it costed $1 to inspect each one, I see why you would multiple 30*$1, but why would you add something else to it? And in this case what would you add?

My picture is not attaching so the formula given is:
Total Cost= overhead cost + ('cost/unit of sampling' * max sample size) + ('cost/unit of inspecting' * average samples size)
 

GRP

Involved In Discussions
#2
Hello!

I'm studying for the CQE and I've come across something else in the primer that isn't quite clicking. See the first equation in the attached picture.

I don't really understand the difference between variables B and C and then how they logically fit in the equation-

Cost per sampling* max samples makes sense, but why then would you add to it "cost per inspection unit* average samples"?

So if you had 30 samples from a 500 PC lot and it costed $1 to inspect each one, I see why you would multiple 30*$1, but why would you add something else to it? And in this case what would you add?

My picture is not attaching so the formula given is:
Total Cost= overhead cost + ('cost/unit of sampling' * max sample size) + ('cost/unit of inspecting' * average samples size)
Does the inspection "consume" the part? Is it possible you are unable to sell it due to the inspection?

If applied to destructive tests it makes sense to consider the cost of inspection plus the cost of the part.
 

stm08007

Starting to get Involved
#3
Does the inspection "consume" the part? Is it possible you are unable to sell it due to the inspection?

If applied to destructive tests it makes sense to consider the cost of inspection plus the cost of the part.
That was what I was thinking it had to mean, but it is definitely not clear.. so :
"Cost/unit of sampling" = physical price of the part which you no longer can sell
"Cost/unit of inspection" = labor aspect of actually testing the part?

I think those terms can be interchanged as well-- which one makes sense to multiply by the max expected sample size vs. the mean sample size
 

John Predmore

Involved In Discussions
#4
Total Cost= overhead cost + ('cost/unit of sampling' * max sample size) + ('cost/unit of inspecting' * average samples size)
I can imagine a scenario where the cost to collect and prepare a sample is significant. For example, the cost of a metallurgical sample - the sample must be mounted, sectioned, and polished, which takes a half an hour. If you were looking for an internal defect of low frequency, like an occlusion perhaps, you might section a handful of parts before you get lucky and find one defect in the plane of the saw cut. The cost of looking at one part under a microscope would be trivial compared to the destruction of many potential samples. In the total cost equation, the distinction between multipliers of max sample size versus average sample size may imply you collect more samples than you inspect, on average.
 


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