Use in fiber-optic cable communications system

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Two-alternative components are being considered for use in a fiber-optic cable communications system. One component has a unit cost of $840 and a Weibull failure distribution with β=2 and θ=10,000 hr. The other component has a unit cost $870 and an exponential failure distribution with an MTTF of 10,000 hr. It is estimated that the selected component will experience 2000 operating hours a year and the system is being designed for a 20-year life. Any component failure will require a replacement at the current unit cost. Assuming a 3% interest rate, which is the preferred component?

Reference no: EM131280113

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