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:5 spare parts with frequency 0.19;6 spare parts with frequency 0.15;7 spare parts with frequency 0.18;8 spare parts with frequency 0.07; and 9 spare parts with frequency 0.41. For what range of shortage costs would stocking 7 spare parts constitute an optimal decision?

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