The expected cost of the current maintenance policy

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Reference no: EM13780602

The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,000. The current maintenance policy (with station employees performing maintenance) has yielded the following history

number of breakdowns

0 1 2 3 4 5

Number of years in which breakdowns occurred.

3 3 1 3 11 0

The expected number of breakdowns per year with station employees performing maintenance =_____breakdowns per year (round to two decimal places)

The expected cost of the current maintenance policy=____(round to two decimal places)

Should they outsource or not?

Reference no: EM13780602

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