What is the probability that, barring replacement now, the equipment will last until age 13?What is the expected cost of replacement if the equipment is not replaced now?Under what condition a, b and c, is expected cost lower if equipment is replaced now, rather than under the age 13 policy? Suppose that the lifespan of a piece of equipment is normally distributed with mean 10 years and standarddeviation of 3 years. A particular piece of equipment's current age is 11 years. The firm is consideringtwo options; i) replace it now, ii) wait until age 13 to replace it (unless it dies before then, in which casean unscheduled replacement is necessary).Suppose that immediate replacement will cost the company a TL. Replacement at age 13 (if the equip-ment lasts that long) will cost b TL, where b < a. An unscheduled replacement between now and age 13(that is, if the equipment dies suddenly during the next two years) will cost c TL, where c > a.

Given that the lifespan of a piece of equipment is normally distributed with mean 10 years and…

What is the probability that, barring replacement now, the equipment will last until age 13? What is the expected cost of replacement if the equipment is not replaced now? Under what condition a, b and c, is expected cost lower if equipment is replaced now, rather than under the age 13 policy?

What is the probability that, barring replacement now, the equipment will last until age 13? What is the expected cost of replacement if the equipment is not replaced now? Under what condition a, b and c, is expected cost lower if equipment is replaced now, rather than under the age 13 policy?

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Suppose that the lifespan of a piece of equipment is normally distributed with mean 10 years and standarddeviation of 3 years. A particular piece of equipment’s current age is 11 years. The firm is consideringtwo options; i) replace it now, ii) wait until age 13 to replace it (unless it dies before then, in which casean unscheduled replacement is necessary).Suppose that immediate replacement will cost the company a TL. Replacement at age 13 (if the equipment lasts that long) will cost b TL, where b < a. An unscheduled replacement between now and age 13(that is, if the equipment dies suddenly during the next two years) will cost c TL, where c > a.• What is the probability that, barring replacement now, the equipment will last until age 13? What is the expected cost of replacement if the equipment is not replaced now?• Under what condition a, b and c, is expected cost lower if equipment is replaced now, rather thanunder the age 13 policy?
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