Question: please help 41. A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the

please help

41. 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 $200 each, and any unused spares will have an expected salvage value of $50 each. The probability of usage can be described by this distribution: Number 0123 Probability 10.50 .25 15 If a part fails and a spare is not available, two days will be needed to obtain a replacement and install it. The cost for idle equipment is $500 per day. What quantity of spares should be ordered? Page 553 a. Use the ratio method. b. Use the tabular method (see Table 12.3)

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