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The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: Number of breakdowns Number of years which breakdowns occurred 0 4 1 2 3 2 3 5 4 5 6 1 a) The expected number of breakdowns per year with station employees performing maintenance = breakdowns per year (round your response to two decimal places). (round your response to two decimal places). b) The cost of the current maintenance policy = Expected number of breakdowns x Breakdown cost = $ c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service is $5,200 per year. Given this information, for maintenance the option is the most economical option.

The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: Number of breakdowns Number of years which breakdowns occurred 0 4 1 2 3 2 3 5 4 5 6 1 a) The expected number of breakdowns per year with station employees performing maintenance = breakdowns per year (round your response to two decimal places). (round your response to two decimal places). b) The cost of the current maintenance policy = Expected number of breakdowns x Breakdown cost = $ c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service is $5,200 per year. Given this information, for maintenance the option is the most economical option.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: D Number of breakdowns 0 Number of years in which breakdowns occurred 4 1 2 2 3 3 5 4 6 5 1 a) The expected number of breakdowns per year with station employees performing maintenance = breakdowns per year (round your response to two decimal places). (round your response to two decimal places). b) The cost of the current maintenance policy = Expected number of breakdowns x Breakdown cost = $ c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service is $5,200 per year. Given this information, for maintenance the option is the most economical option.
Transcribed Image Text:The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: D Number of breakdowns 0 Number of years in which breakdowns occurred 4 1 2 2 3 3 5 4 6 5 1 a) The expected number of breakdowns per year with station employees performing maintenance = breakdowns per year (round your response to two decimal places). (round your response to two decimal places). b) The cost of the current maintenance policy = Expected number of breakdowns x Breakdown cost = $ c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service is $5,200 per year. Given this information, for maintenance the option is the most economical option.
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