A decision about qualityDiscrete Mathematics Level pending
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. How much would the factory manager be willing to spend on this team per day?