A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $400 each and have no salvage value. The manager has compiled a frequency distribution for the probable usage of spare parts, as shown: $$\begin{array} { l l }
\text { Usage } & \text { Frequency } \
\hline 0 & .08 \
1 & .30 \
2 & .24 \
3 & .20 \
4 & .18
\end{array}$$ For what range of shortage costs would stocking one spare part constitute an optimal decision?

Question

A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $400 each and have no salvage value. The manager has compiled a frequency distribution for the probable usage of spare parts, as shown: $$\begin{array} { l l } 
\text { Usage } & \text { Frequency } \
\hline 0 & .08 \
1 & .30 \
2 & .24 \
3 & .20 \
4 & .18
\end{array}$$ For what range of shortage costs would stocking one spare part constitute an optimal decision?

Quizplus · Accepted Answer

The Answer of A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $400 each and have no salvage value. The manager has compiled a frequency distribution for the probable usage of spare parts, as shown: $$\begin{array} { l l } 
\text { Usage } & \text { Frequency } \
\hline 0 & .08 \
1 & .30 \
2 & .24 \
3 & .20 \
4 & .18
\end{array}$$ For what range of shortage costs would stocking one spare part constitute an optimal decision?

A Manager Intends to Order a New Machine and Must Usage Frequency 0.081.302.243.204.18\begin{array} { l l } \text { Usage } & \text { Frequency } \\\hline 0 & .08 \\1 & .30 \\2 & .24 \\3 & .20 \\4 & .18\end{array} Usage 01234​ Frequency .08.30.24.20.18​​

A Manager Intends to Order a New Machine and Must $\begin{array} { l l } \text { Usage } & \text { Frequency } \\\hline 0 & .08 \\1 & .30 \\2 & .24 \\3 & .20 \\4 & .18\end{array}$