Answered: Question 1 The probability that…

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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Question 1

The probability that equipment in a hospital lab will need recalibration is given in the table below. A service firm will provide maintenance and provide any necessary calibrations for $650 per month. Recalibration costs $500 per time.

Number of Recalibrations	0	1	2	3	4
Probability of Occurrence	.15	.25	.30	.20	.10

Determine which approach, recalibration as needed or the service contract, would cost less.

Question 2

Determine the optimum preventive maintenance frequency for each of the pieces of equipment below if breakdown time is normally distributed.

Equipment	Average Time (days) between Breakdowns	Standard Deviation	Preventive Maintenance Cost	Breakdown Cost
A201	20	2	$300	$2300
B400	30	3	$200	$3500
C850	40	4	$250	$4800

Hint:

Step 1:Compute the ratio of preventive cost to breakdown cost for each piece of equipment (round to a maximum of four decimals).

Step 2:

Find the z value corresponding to the ratio from Step 1 and use this value of z to compute the maintenance interval. Round z and maintenance interval to two decimals. Maintenance Interval = Mean + (z * Standard Deviation)

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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