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A department supervisor is considering purchasing one of two comparable photocopy machines, A or B. Machine A costs $10,000 and Machine B costs $1I0,500.This department replaces photocopy ma- chines every three years. The repair contract for Machine A costs $50 per month and covers an un- limited number of repairs. he repair contract for Machine B costs $200 per repair. Based on past performance, the distribution of the numbe of repairs needed over any one-year period for Machine B is shown below. 5. Number of Repairs Probability 0.50 0.25 0.15 0.10 + 0.25 + 0.35 You are asked to give a recommendation based on overall cost as to which machine, A or B, along with its repair contract, should be purchased. What would your recommendation be? Give statistical justification to support you recommendation. A: 4 10,00 0 B: #1D, S00 right anyher isB simce otsllo10

A department supervisor is considering purchasing one of two comparable photocopy machines, A or B. Machine A costs $10,000 and Machine B costs $1I0,500.This department replaces photocopy ma- chines every three years. The repair contract for Machine A costs $50 per month and covers an un- limited number of repairs. he repair contract for Machine B costs $200 per repair. Based on past performance, the distribution of the numbe of repairs needed over any one-year period for Machine B is shown below. 5. Number of Repairs Probability 0.50 0.25 0.15 0.10 + 0.25 + 0.35 You are asked to give a recommendation based on overall cost as to which machine, A or B, along with its repair contract, should be purchased. What would your recommendation be? Give statistical justification to support you recommendation. A: 4 10,00 0 B: #1D, S00 right anyher isB simce otsllo10

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section: Chapter Questions
Problem 68P
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Don’t get why it’s B that is cheaper
5. A department supervisor is considering purchasing one of two comparable photocopy machines, A or B. Machine A costs $10,000 and Machine B costs $I0,500.This department replaces photocopy ma- chines every three years. The repair contract for Machine A costs $50 per month and covers an un- limited number of repairs.T he repair contract for Machine B costs $200 per repair. Based on past performance, the distribution of the number of repairs needed over any one-year period for Machine B is shown below. Number of Repairs 2 Probability 0.50 0.25 0.15 0.10 + 0.25 + 0:3=0.85 You are asked to give a recommendation based on overall cost as to which machine, A or B, along with its repair contract, should be purchased. What would your recommendation be? Give statistical justification to support your recommendation. A: 10,000 B: # 15, S00 2.
Transcribed Image Text:5. A department supervisor is considering purchasing one of two comparable photocopy machines, A or B. Machine A costs $10,000 and Machine B costs $I0,500.This department replaces photocopy ma- chines every three years. The repair contract for Machine A costs $50 per month and covers an un- limited number of repairs.T he repair contract for Machine B costs $200 per repair. Based on past performance, the distribution of the number of repairs needed over any one-year period for Machine B is shown below. Number of Repairs 2 Probability 0.50 0.25 0.15 0.10 + 0.25 + 0:3=0.85 You are asked to give a recommendation based on overall cost as to which machine, A or B, along with its repair contract, should be purchased. What would your recommendation be? Give statistical justification to support your recommendation. A: 10,000 B: # 15, S00 2.
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