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One cause of the downtime in Problem 3 was traced to a specific piece of computer hardware. Management believes that switching to a different hardware component will result in the following transition probabilities:
From
Running
To
Down
0.95
0.05
0.60
0.40
a. What are the steady-state probabilities of the system being in the running and down states?
b. If the cost of the system being down for any period is estimated to be $500 (including lost profits for time down and maintenance), what is the breakeven cost for the new hardware component on a time-period basis?
Determine the number of cycles per day and a production quantity per cycle for this set of products that achieves fairly level production:
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Each system component has a backup with a probability of .90 and a switch that is 100 percent reliable. Backups with .90 probability and a switch that is 99 percent reliable.
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