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Rent-to-buy (RTB) rents medical equipment with the option of converting rentals into eventual purchases. The company is looking to understand better its X-ray machine rental operations. Here are some measures of their current operations. For X-ray machines, RTB signs 1,000 new leases every month. Each lease lasts a period of 3 months. Customers return the X-ray machine to RTB upon the completion of 3 months. In addition to those in circulation (i.e., X-ray machines that are currently with customers), RTB holds about 1,500 X-ray machines in storage. a) On average, how many X-ray machines does RTB own?
b) Some of RTB's customers purchase their X-ray machines at the end of their lease. On average, RTB sells 220 X-ray machines every month to end-of-lease customers. RTB immediately replaces them by purchasing new units. On average, how long does RTB own a machine?
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