Question: A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The

A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $455 each and have no salvage value. The manager has compiled the frequency distribution for the probable usage of spare parts:8 spare parts with frequency 0.07;9 spare parts with frequency 0.19;10 spare parts with frequency 0.1;11 spare parts with frequency 0.2; and 12 spare parts with frequency 0.44. For what range of shortage costs would stocking 10 spare parts constitute an optimal decision ?

Between 79.93and 128

Between 159.9and 255.9

Between 191.8and 307.1

Between 239.8and 383.9

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