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 $441 each and have no salvage value. The manager has compiled the frequency distribution for the probable usage of spare parts:6 spare parts with frequency 0.08;7 spare parts with frequency 0.07;8 spare parts with frequency 0.21;9 spare parts with frequency 0.08; and 10 spare parts with frequency 0.56. For what range of shortage costs would stocking 8 spare parts constitute an optimal decision ?

a. Between 77.82and 248.1 b. Between 38.91and 124 c. Between 93.39and 297.7 d. Between 116.7and 372.1

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