There is an identical process to the one in scenario 1 except each workstation has rework capability that converts some defects into good parts. The fraction of defective parts converted to good ones is 60% for stage 1, 75% for stage 2, and 80% for stage 3. Fallout from the rework facilities must be scrapped. 3 PPP 40% 25% 20% How many parts be must started now to achieve 1000 parts per day output? Assuming that the rework stations have the same scrap costs as in problem lb, what is the total scrap cost for an output batch of 1000? Which of the following reduces the total scrap cost more: reducing the fraction defective at workstation 1 from 3% to 2%, or reducing the fraction defective at workstation 3 from 7% to 5%? What is the amount of reduction with the best alternative?
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