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 $409 each and have no salvage value. The manager has compiled the frequency distribution for the probable usage of spare parts:2 spare parts with frequency 0.16;3 spare parts with frequency 0.19;4 spare parts with frequency 0.18;5 spare parts with frequency 0.21; and 6 spare parts with frequency 0.26. For what range of shortage costs would stocking 4 spare parts constitute an optimal decision ?

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