A team of business students is working for an outdoor adventure equipment company. The team is tasked with optimizing the inventory management for a line of specialized outdoor gadgets that are essential for wilderness excursions. One critical component of these gadgets is prone to unexpected failures. The team has the option to stock spare units of this component, but each spare unit carried costs $$420.$ If a breakdown occurs without a spare available, new units must be ordered, and the company will incur a total cost of $$630$ per replacement unit.

Determine the costs of carrying $0$ to $3$ spare units $($assuming no more than three spares are required$).$ Complete the following table of possible outcomes. Enter the total costs in their respective cells.

For example, if the number of spares required is two, and only one spare was carried, then the total cost will be $$420+$ $$630$
$=$ $$1050.$

Answer rating: 100% (QA)

1 Calculate the cost of carrying spare units Cost per spare unit 480 Lets assume the probability o... View the full answer