18. An electronic machine has a component that is subject to failure and needs replacement immediately when this occurs. A total of 200 such machines are used in a company. The cost of each replacement is Rs 80 per item and for group replacement it is Rs 5,000 for all the 200 machines. Records of previous failure rates indicate the following pattern:

10 per cent would fail during the first month 20 per cent would fail during the second month 20 per cent would fail during the third month 30 per cent would fail during the fourth month 20 per cent would fail during the fifth month.

Assuming that group replacement can be carried out only at the month end, what group replacement policy would you suggest? Consider an 8-month period for cost evaluation.