18:00 C' ,il 37% 00 00 EX:1 The frequency of breakdown of a piece of digger per month is shown in the table. The cost of a breakdown is $3,000 and the cost of preventive maintenance is $2,000 per month. Assume that the digger breakdown can be avoided if preventive maintenance is performed. Should the manager use preventive maintenance, or would it be better to fix the equipment when it breaks down? Number of breakdowns probability 0.2 0.1 0.2 0.3 0.2 EX:2 The possibility of a breakdown of the water crane motor repair machine appears in the following table. The cost of the breakdown is $100 per hour and the cost of preventive maintenance is $300 per week. Assume that the water crane motor breakdown can be avoided if preventive maintenance is performed. Should the operation manager use preventive maintenance monthly, or would it be better to fix the equipment when it breaks down? Number of breakdowns 0.2 probabiity 0.2 0.5 0.1 Annotate Bookmark

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Answer:

1Calculate the expected cost of breakdown for the digger: $3,000 * 0.2 +$0 * 0.1 + $0 * 0.2 +$0 * 0.3 + $0 * 0.2 =$600

2Calculate the cost of preventive maintenance for the digger: $2,000

3Compare the expected cost of breakdown ($600) with the cost of preventive maintenance ($2,000)