Should you build your circuit with ordinary devices

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Reference no: EM131081885

A particular circuit works if all 10 of its component devices work. Each circuit is tested before leaving the factory. Each working circuit can be sold for k dollars, but each nonworking circuit is worthless and must be thrown away. Each circuit can be built with either ordinary devices or ultrareliable devices. An ordinary device has a failure probability of q = 0.1 while an ultrareliable device has a failure probability of q/2, independent of any other device. However, each ordinary device costs $1 while an ultrareliable device costs $3. Should you build your circuit with ordinary devices or ultrareliable devices in order to maximize your expected profit E[R]? Keep in mind that your answer will depend on k.

Reference no: EM131081885

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