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a) A product has four components A, B, C, and D. The finished product must have a reliability of .95. The first three components come from a supplier, and have reliabilities of working correctly of 0.99, 0.98, and 0.995 respectively.
The fourth component is being designed now. What must the reliability of component D be in order to meet the product reliability condition? Calculate your result to 4 decimal places (0.xxxx).
b) General Grant must send orders to General Butler. Carrier pigeons are the medium of choice. A single pigeon has a 0.7 probability of arriving at the proper destination in a timely fashion.
How many pigeons, each carrying an identical set of orders, must Grant send in order for him to have 98% confidence (reliability) that the orders reach General Butler?
The cost function for a firm is given by TC = 6,000 + 12.5Q. The firm sells output in a perfectly competitive market and other firms in the industry sell at a price of P = 25 - 0.5Q. What level of output should be produced to maximize profits? The fi..
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