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Supplier Selection based on Total Cost question

I

InspectorJK

#1
You need to purchase a product and it costs $4 to inspect each part and they have a failure cost of $80. calculate an ideal sample size

Your organization needs 10,000 units annually in shipments of 500 and two suppliers have capacity to provide the product, they are:

Supplier Delivered cost per unit Historical fraction defective
A $5.00 0.005
B $4.90 0.01

Each time a shipment is rejected, your organization incurs a cost of $250 to cover purchasing, quality and production’s time to deal with the rejection.

This is not the cost of sorting rejected lots, that cost is incurred by either A or B. Which supplier would you choose to minimize total annual cost (ignoring lot sizing and the time value of money)

I found out the sample size using ANSI - ASQ z1.4 , which i got 50. Can anyone help me to help me to find an answer for this rather easy question?
 
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Marc

Hunkered Down for the Duration with a Mask on...
Staff member
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#4
I'm not a supplier engineer, so I don't have the answer. Just clarifying. I assume this is a student question, correct?
 

Marc

Hunkered Down for the Duration with a Mask on...
Staff member
Admin
#5
A quick "Bump". My Thanks in advance to anyone here who can help with this one.
 
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