Academic MBA Question:
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Question: An auto component manufacturing company is contemplating introducing a new inspection process in their assembly line to save on rectifying cost. The current production is in batches; each batch produces 5000 components. The cost of inspection of each component is Rs 50, the cost of rectifying each defective component is Rs 250. If a defective component is sent to the customer and returned, it will cost the company Rs.500. Calculate at what percentage of defective rate it would be beneficial for the company to adopt the proposal
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