A decision about quality

A toothbrush factory produces 200,000 toothbrushes every day. The manufacturing process isn't perfect, and there are sometimes toothbrushes made with defects.

An analyst has calculated that each toothbrush has a 0.004 probability of having a defect. If a customer receives a defective product, then it will cost the company $5 to replace the product and satisfy the customer.

The factory manager can choose to hire a Quality Assurance team to find and fix all defective toothbrushes as they are produced. What is the maximum amount the factory manager would be willing to spend on this team per day?

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