QUESTION 6 (MAINTENANCE AND RELIABILITY: COMPARING PREVENTIVE AND BREAKDOWNMAINTENANCE COSTS)17.24 Wharton Manufacturing Company operates its 23 large and expensive grinding and lathe machinesfrom 7 A.M. to 11 P.M., 7 days a week. For the past year, the firm has been under contract with Simkin andSons for daily preventive maintenance (lubrication, cleaning, inspection, and so on). Simkin's crew worksbetween 11 P.M. and 2 A.M. so as not to interfere with the daily manufacturing crew. Simkin charges $645per week for this service. Since signing the maintenance contract, Wharton Manufacturing has noted anaverage of only three breakdowns per week. When a grinding or lathe machine does break down during aworking shift, it costs Wharton about $250 in lost production and repair costs.After reviewing past breakdown records (for the period before signing a preventive maintenance contractwith Simkin and Sons), Wharton's production manager was able to summarize the following patterns:1 2 345 6 7 8Number of breakdowns per week 0Number of weeks in whichbreakdowns occurred13 5 9 11 7 8 5Total weeks of historical data: 50The production manager is not certain that the contract for preventive maintenance with Simkin is inWharton's best financial interest. He recognizes that much of his breakdown data are old but is fairlycertain that they are representative of the present picture.What is your analysis of this situation and what recommendations do you think the production managershould make?

Production is the process in which inputs are combined to have the required output. It includes a…

Answered: The production manager is not certain…

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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Demand for stereo headphones and music players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for this year was as follows: MONTH DEMAND (UNITS) January 4,150 February 4,250 March 3,950 April 4,350 May 4,950 June 4,650 July 5,250 August 4,850 September 5,350 October 5,650 November 6,250 December 5,950 a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.8. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. To be reasonably confident of meeting demand, Nina decides to use 3 standard errors of estimate for safety. How many additional units should be held to meet this…
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