Question: A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the new equipment. The
A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the new equipment. The spares cost $ each, and any unused spares will have an expected salvage value of $ each. The probability of usage can be described by this distribution:
tableNumberProbability
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If a part fails and a spare is not available, days will be needed to obtain a replacement and install it The cost for idle equipment is $ per day. What quantity of spares should be ordered?
a Use the ratio method. Round the SL answer to decimal places and the number of spares to the nearest whole number.
so we need to order
Spares.
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