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A simple two-state cost investigation model calls for a decision to investigate if the following inequality holds: L(1 - P) > I + C(1 - P) If: L = excess operating cost if out of control P = probability that the process is in control I = cost of investigation C = cost of correction if out of control
The value (1 - P) must be A. A measure of the seriousness of the consequences. B. The inverse of the probability matrix. C. The probability that the process is out of control. D. The transpose of the probability matrix.
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