Q 32

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 $485 each and have no salvage value. The manager has compiled the frequency distribution for the probable usage of spare parts:3 spare parts with frequency 0.07:4 spare parts with frequency 0.19;5 spare parts with frequency 0.19;6 spare parts with frequency 0.15; and 7 spare parts with frequency 0.4. For what range of shortage costs would stocking 5 spare parts constitute an optimal decision ? O a. Between 85.2and 198.4 Ob. Between 170.4and 396.8 O c. Between 204.5and 476.2 Od. Between 255.6and 595.2