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Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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
Transcribed Image Text:A Florida lottery machine and printer at Store #8302 operates
360 days a year. If the machine does not work and breaks
down, it costs the Florida Lottery Commission $2,160 per day. If
store employees are trained to perform local tests on the
machine each day plus the costs of machine repairpersons,
these preventive maintenance costs average $850 per day. If
preventive maintenance is performed daily, the probability the
equipment fails is zero. The probability of store lottery machine
breakdown is as follows.
Number of Lottery
Machine Breakdowns
per Day
0
1
1/3
Probability of a
breakdown
What are the economics of the situation? Do not round
intermediate calculations. Round your answers to the nearest
dollar.
The expected cost of a breakdown per day is $
The Florida Lottery Commission saves $
by performing preventive maintenance daily.
2
1/3
1/3
per year
SAVE
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