Question: 14.12 You are comparing replacement of the current lab, which has a cost function of C= 200,000 + 25 x Q, with an automated lab

14.12

You are comparing replacement of the current lab, which has a cost function of C= 200,000 + 25 x Q, with an automated lab that has a cost function of C= 300,000 + 20 x Q. Doing so would reduce the error rate from 1.5 percent to 1 percent . Your volume is expected to be 18,000 tests per year. Should you choose the automated lab? Briefly explain the logic.

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Answer At Q 18000 Cost in current lab C 200000 25 x 18000 200000 ... View full answer

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