One cause of the downtime in Problem 3 was traced to a specific piece of computer hardware. Management believes that switching to a different hardware component will result in the following transition probabilities:

a. What are the steady-state probabilities of the system being in the running and down states?
b. If the cost of the system being down for any period is estimated to be $500 (including lost profits for time down and maintenance), what is the breakeven cost for the new hardware component on a time-periodbasis?

Transcribed Image Text:

To Down From Running Down Running 0.95 0.60 0.40