2. The following data was collected regarding breakdowns. What is your recommendation? The cost of a breakdown is $600. If we use preventative maintenance the cost of the maintenance contract will be $475 per month, with the guarantee of no more than 1.5 breakdowns per month. 15 marks A A x C # breakdowns # Breakdowns # Months probability 0. 0.08 1 0.14 0.1351 7 0.19 0.3784 11 0.3 0.8919 0.24 0.973 2 0.05 0.2703 2.6486 7 Total 37 8 9 -1 52 2345

33 37 34 2. The following data was collected regarding breakdowns. What is your recommendation? 35 The cost of a breakdown is $600. If we use preventative maintenance the cost 36 of the maintenance contract will be $475 per month, with the guarantee of no more than 1.5 breakdowns per month. 15 marks 38 39 A B 40 # Breakdowns # Months probability #breakdowns 3 0.08 0 1 5 0.14 0.1351 2 7 0.19 0.3784 3 11 0.3 0.8919 9 0.24 0.973 5 2 0.05 0.2703 Total 1 2.6486 41 42 an 43 ANO 44 45 4 NO 37 46 47 48 49 50 51 52 53