a. What is the expected failure cost per part? The probability of failure is % The expected failure cost per part is $_ b. On each part, a rather unreliable backup can be installed that has a reliability of just 40.00%. What is the maximum amount that the firm should be willing to pay per part to install the backup? The new probability of failure is % The new expected cost of failure is $_ The firm should pay as much as $____ for the backup c. Suppose that a second 40.00% reliable backup part could be installed, so that if both the original and the first backup part fail, then the second backup part will be used. If that second backup part costs $120.00, should it be installed? The new probability of failure is % The new expected cost of failure is $___ The firm should pay as much as $_____. for the backup Should the firm install the second backup?
a. What is the expected failure cost per part? The probability of failure is % The expected failure cost per part is $_ b. On each part, a rather unreliable backup can be installed that has a reliability of just 40.00%. What is the maximum amount that the firm should be willing to pay per part to install the backup? The new probability of failure is % The new expected cost of failure is $_ The firm should pay as much as $____ for the backup c. Suppose that a second 40.00% reliable backup part could be installed, so that if both the original and the first backup part fail, then the second backup part will be used. If that second backup part costs $120.00, should it be installed? The new probability of failure is % The new expected cost of failure is $___ The firm should pay as much as $_____. for the backup Should the firm install the second backup?
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Transcribed Image Text:Consider an expensive part with a reliability
of 96.8%. If the part fails, it will cost the firm
$11,000.
a. What is the expected failure cost per
part?
The probability of failure is %
The expected failure cost per part is $_.
b. On each part, a rather unreliable backup
can be installed that has a reliability of just
40.00%. What is the maximum amount that
the firm should be willing to pay per part to
install the backup?
The new probability of failure is
The new expected cost of failure is $
The firm should pay as much as $____ for
the backup
%
c. Suppose that a second 40.00% reliable
backup part could be installed, so that if
both the original and the first backup part
fail, then the second backup part will be
used. If that second backup part costs
$120.00, should it be installed?
The new probability of failure is
%
The new expected cost of failure is $_.
The firm should pay as much as $_____ for
the backup
Should the firm install the second backup?
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