Question: your instructor for grading. To purchase new processing equipment, a manager must decide on the number of spare parts to order with the new equipment.

your instructor for grading. To purchase new

your instructor for grading. To purchase new processing equipment, a manager must decide on the number of spare parts to order with the new equipment. The spares cost $200 each, and any unused spares wa have an expected salvage value of $50 each. The probability of usage can be described by this distribution: 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? Probability of # of Spares Demand 30

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