Question: 4 . 2 KFC has experienced breakdowns with their ovens in the past 1 8 months at rates indicated below. Each time an oven breaks
KFC has experienced breakdowns with their ovens in the past months at rates indicated below. Each time an oven breaks down; the restaurant loses an estimated R in contingency and service expenses. KFC has an option of purchasing a service contract for preventive maintenance of their oven from the supplier at a price of R per month. Even if they purchase preventive maintenance service plan, they will still experience breakdowns, averaging breakdown per month: Calculate the monthly breakdown probability based on the past data. Calculate the expected number of breakdowns per month based on the past data. Calculate the expected cost of breakdown per month with no preventive maintenance. Should the company continue with current maintenance policy, or should they outsource preventive maintenance? Show all calculations
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