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 $485 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 0.18;7 spare parts with frequency 0.19;8 spare parts with frequency 0.14;9 spare parts with frequency 0.1; and 10 spare parts with frequency 0.39. For what range of shortage costs would stocking 8 spare parts constitute an optimal decision ?

Between 284.8and 504.8

Between 142.4and 252.4

Between 341.8and 605.8

Between 427.3and 757.2

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