A company manufactures chairs at a cost of $70 each. The following are probabilities of defective chairs in a given production run: probability of 1% defective chairs: 40%; probability of 2% defective chairs: 35%; probability of 3% defective chairs: 25%. When a defective chair is detected, it must be removed from the assembly line and replaced. This process adds an extra $10 to the cost of the replaced chair. What is the expected cost to the company of a batch of 500 chairs?
500 x 70= 35,000 5 defective chairs is 5x60= 300
10 chairs 10 x 60= 600 15 defective chairs = 900
So with that I got 35,300 + 35,600+ 35,900= 107100 then divide that by three = 35,700
My answer is wrong.
35,902.50 is the correct answer
I do not know the answer yet, but to start off....why did you multiply the cost of the defective chairs x 60 instead of 10? Each defective chair adds $10 to the cost soooooo 500 x 70 + 10(#defective chairs) = total cost