Question: Technico Ltd. has installed a machine costing Rs 4 lacs and is in the process of deciding on an appropriate number of a certain spare

Technico Ltd. has installed a machine costing Rs 4 lacs and is

in the process of deciding on an appropriate number of a

certain spare parts required for repairs. The spare parts cost

Rs 4,000 each but are available only if they are ordered now.

In case the machine fails and no spares are available, the cost

to the company of mending the plant would be Rs 18,000.

The plant has an estimated life of 8 years and the probability

distribution of failures during this time, based on experience

with similar machines, is as follows:

Fail. during 8 yrs 0 1 2 3 4 5 6+

Probability .1 .2 .3 .2 .1 .1 0

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To solve this problem we need to calculate the expected cost for each possible number of spare parts bought 0 to 5 because beyond that would have no failures We will assess whether buying each number ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

D-R 1.5 (7 pts) Daneel is now pushing harder and finally gets the fridge and Susan sitting on top of it to move together. Daneel is applying a constant force FNR= 1000N and managed to get the fridge...

If we draw 100 numbers from N(50, 20), using the empirical rule, we expect how many of these numbers to be between 30 and 70?

for this case study carefully read the article titled "The Case for Reparations" The Atlantic Introduction Provide an overview of the situation Identify critical issues underlying the problems...

Technico Ltd. has installed a machine costing Rs 4 lacs and is in the process of deciding on an appropriate number of a certain spare parts required for repairs. The spare parts cost Rs 4,000 each...

What aspects should be considered in determining the appropriate salary for candidates who join the organization in mid-career? What short and long-term initiatives should be taken to ensure good...

Joshi was at a crossroads: should he borrow money to ramp up the growth of the business through new capacity building or see ServiceForce grow through more and more franchises? Evaluate financial...

Final Paper Instructions/Guidelines: The final paper must be a minimum of 5 pages and a maximum of 7 pages in APA format. You can find APA guidelines in the Week Six folder under final paper tips....

AF 304 SEMESTER 2 - 2019 MAJOR ASSIGNMENT (15%) Due date: Friday 11th October 2019 @ 3.30pm with School of Accounting Secretary Audit Cases - A Practical Approach to Auditing 1.0 Introduction Audit...

AF 304 SEMESTER 2 - 2019 MAJOR ASSIGNMENT (15%) Due date: Friday 11 th October 2019 @ 3.30pm with School of Accounting Secretary Audit Cases - A Practical Approach to Auditing 1.0Introduction Audit...

Need ONLY an answer to Part C, step 1, questions 1 and 3. Term Project Part A: Understanding Financial Statements Locate and use an annual report STEP 1: The Company Assigned to you Find the most...

Showthat if a1, a2, . . . , an are n distinct real numbers, exactly n 1 multiplications are used to compute the product of these n numbers no matter how parentheses are inserted into their product.

An analysis of comparative balance sheets, the current years income statement, and the general ledger accounts of Judd Corp. uncovered the following items. Assume all items involve cash unless there...

Find lim ( x , y ) ( - 1 , - 2 ) x 2 + 2 y 2 - 3 2 .

The following data relate to the direct materials cost for the production of 10,000 automobile tires: Actual: 145,000 lbs. at $2.80 per lb. Standard: 150,000 lbs. at $2.75 per lb. a. Determine the...

Specific financial decisions often depend more on one type of accounting information than another. Consider the following independent, hypothetical situations: 1. Pierson Industries is thinking about...

The distance from Potsdam to larger markets and limited air service have hindered the town in attracting new industry. Air Express, a major overnight delivery service, is considering establishing a...

The controller of Pueblo Ceramics Inc. wishes to prepare a cost of goods sold budget for April. The controller assembled the following information for constructing the cost of goods sold budget: Use...

Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the companys new fleet of jet aircraft and a discount...

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

In India, the gift is usually presented to the lady of the house. What is the normal etiquette of presenting gift s in the Middle East?

Th e application letter and the rsum perform: (a) the same task (b) two diff erent tasks (c) two opposite tasks (d) overlapping tasks

It is acceptable in the United States to address a casual acquaintance by the fi rst name. It communicates a sense of familiarity. How might those of other nationalities, such as Germans, respond to...