Question: 4 . ( 1 2 pts ) A computer system consists of three critical components: a mother board, a power supply, and a hard disk.

4.(12 pts) A computer system consists of three critical components: a mother board, a power supply, and a hard disk. The failure time of each component follows an exponential distribution with MTBF as follows:
Mother board 500,000 hrs
Power supply 250,000 hrs
Hard drive 250,000 hrs
The U.S. Government is purchasing 10,000 such computers from Dell. Each computer will be used 1,460 hours a year on average, and failures occurring during the first year of operations are automatically covered by Dell free of charge.
Dell is considering offering only one of the following two extended warranty plans to the U.S. Government.
Plan 1 charges $90 per machine for a 3-year extended warranty, which will cover the second and third year failures.
Plan 2 charges $100 per machine for a 4-year extended warranty, which will cover the second, third, and fourth year failures.
It will cost Dell on average $225 per failure to repair.
Strictly from a profit perspective, which extended warranty plan (1 or 2 above) should Dell offer to the U.S. Government? Justify your answer.

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