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NUMBER OF BREAKDOWNS 1 3. 4 5 NUMBER OF YEARS IN WHICH 4 BREAKDOWNS OCCURRED 1 3.

NUMBER OF BREAKDOWNS 1 3. 4 5 NUMBER OF YEARS IN WHICH 4 BREAKDOWNS OCCURRED 1 3.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The fire department has a number of failures with its
oxygen masks and is evaluating the possibility of outsourcing
prevent ive maintenance to the manufacturer. Becau se of the risk
associated with a fai lure, the cost of each failure is estimated at
$2,000. The current maintenance policy (with station employees
performing ma in tena nce) has yielded the following history:                                                                     This manufacturer will guarantee repairs on any and all fai lures as
part of a service contract. The cost of this service is $5,000 per year.
a) What is the expected number of breakdowns per year with station employees performing maintenance?
b) What is the cost of the current maintenance policy?
c) What is the more economical policy?                                    
NUMBER OF BREAKDOWNS 1 3. 4 5 NUMBER OF YEARS IN WHICH 4 BREAKDOWNS OCCURRED 1 3.
Transcribed Image Text:NUMBER OF BREAKDOWNS 1 3. 4 5 NUMBER OF YEARS IN WHICH 4 BREAKDOWNS OCCURRED 1 3.
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