Respuesta :
The expected cost of producing 500 products is $14300
Explanation:
Given:
Cost of products = $32
Cost of repair = $15
Probability of no defective pens = 80%
Probability of defective pens = 20%
Cost of 500 products = ?
Number of defective products = [tex]\frac{20}{100} X 500[/tex]
n = 100
Number of good products = [tex]\frac{80}{100} X 500[/tex]
n(good) = 400
Cost of production of good products = 400 X $32
= $12800
Cost of defective pens = 100 X $15
= $1500
Expected cost of producing 500 products = $12800 + $1500
= $14300
Therefore, the expected cost of producing 500 products is $14300
Using the expected value concept, it is found that the expected cost of producing 500 products is $35.
The expected value is given by the sum of each outcome multiplied by it's probability.
In this problem:
- 80% of the products are not defective, each costing $32.
- 20% of the products are defective, costing an additional $15, thus $47.
The expected cost is:
[tex]E = 0.8(32) + 0.2(47) = 35[/tex]
The expected cost of producing 500 products is $35.
A similar problem is given at https://brainly.com/question/24855677
