A public utility intends to buy a turbine as part of an expansion plan and must now decide on thenumber of spare parts to order. One part, no. X135, can be purchased for $100 each. Carrying anddisposal costs are estimated to be 145 percent of the purchase price over the life of the turbine. Astockout would cost roughly $88,000 due to downtime, ordering, and “special purchase” factors.Historical records based on the performance of similar equipment operating under similar conditions suggest that demand for spare parts will tend to approximate a Poisson distribution with amean of 3.2 parts for the useful life of the turbine.a. What is the optimal number of spares to order?b. Carrying no spare parts would be the best strategy for what range of shortage cost?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
A public utility intends to buy a turbine as part of an expansion plan and must now decide on the
number of spare parts to order. One part, no. X135, can be purchased for $100 each. Carrying and
disposal costs are estimated to be 145 percent of the purchase price over the life of the turbine. A
stockout would cost roughly $88,000 due to downtime, ordering, and “special purchase” factors.
Historical records based on the performance of similar equipment operating under similar conditions suggest that demand for spare parts will tend to approximate a Poisson distribution with a
mean of 3.2 parts for the useful life of the turbine.
a. What is the optimal number of spares to order?
b. Carrying no spare parts would be the best strategy for what range of shortage cost?
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