Problem 13-41 A manager is going to purchase new processing equipment and must decide on...
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Accounting
Problem 13-41 A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the new equipment. The spares cost $182 each, and any unused spares will have an expected salvage value of $52 each. The probability of usage can be described by this distribution: Number 0 Probability .05 1 .40 2 .20 3 .35 If a part fails and a spare is not available, 2 days will be needed to obtain a replacement and install it. The cost for idle equipment is $670 per day. What quantity of spares should be ordered? a. Use the ratio method. (Round your answer to 2 decimal places.) Service level is 91.16 *, so we need to order 3 Spares. b. Use the tabular method
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