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 $454 each and have no salvage value. The manager has compiled the frequency distribution for the probable usage of spare parts:9 spare parts with frequency 0.17;10 spare parts with frequency 0.21;11 spare parts with frequency 0.06;12 spare parts with frequency 0.07; and 13 spare parts with frequency 0.49. For what range of shortage costs would stocking 11 spare parts constitute an optimal decision ?

a. Between 417.4and 535.1

b. Between 333.9and 428.1

c. Between 139.1and 178.4

d. Between 278.3and 356.7

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