Freezco, Inc., sells refrigerators. The company has issued a warranty on all refrigerators that requires free replacementof any refrigerator that fails before it is three years old. We are given the following information: (1) 3% of all new refrigeratorsfail during their first year of operation; (2) 5% of all one-year-old refrigerators fail during their second year of operation; and(3) 7% of all two-year-old refrigerators fail during their third year of operation. A replacement refrigerator is not covered bythe warranty.a Use Markov chain theory to predict the fraction of all refrigerators that Freezco will have to replace.b Suppose that it costs Freezco $500 to replace a refrigerator and that Freezco sells 10,000 refrigerators per year. If thecompany reduced the warranty period to two years, how much money in replacement costs would be saved?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Freezco, Inc., sells refrigerators. The company has issued a warranty on all refrigerators that requires free replacement
of any refrigerator that fails before it is three years old. We are given the following information: (1) 3% of all new refrigerators
fail during their first year of operation; (2) 5% of all one-year-old refrigerators fail during their second year of operation; and
(3) 7% of all two-year-old refrigerators fail during their third year of operation. A replacement refrigerator is not covered by
the warranty.
a Use Markov chain theory to predict the fraction of all refrigerators that Freezco will have to replace.
b Suppose that it costs Freezco $500 to replace a refrigerator and that Freezco sells 10,000 refrigerators per year. If the
company reduced the warranty period to two years, how much money in replacement costs would be saved?
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