Evaluate expected total cost of both designs

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Reference no: EM1378613

Q. Conventional way of radiation treatment was to target cancer cells while some of healthy sells also get affected. Instrument to provide radiation treatment cost $2 million also it is 90% reliable. New concept targets only cancer cells also equipment costs only $1.25 million with unknown reliability since equipment has not been used. Design-engineers assign a reliability value of 0.98 assuming all of assumptions are correct. If all of assumptions are not correct (equal likely probability), reliability is estimated only about 0.8. Since liability cost is $20 million, engineer faces a decision for subsequent two alternates:

Capture opportunity of accomplishing cost saving also high reliability

Assure a reasonable reliability by conventional design

Set up a decision tree also evaluate expected total cost of both designs. Which design would you prefer?

Reference no: EM1378613

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