I also need to calculate the cost of the current maintenance policy. The fire de
ID: 451453 • Letter: I
Question
I also need to calculate the cost of the current maintenance policy.
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 $2,200. The current maintenance policy (with station employees performing maintenance) has yielded the following history: The expected number of breakdowns per year with station employees performing maintenance = breakdowns per year (round your response to two decimal places).Explanation / Answer
Taking weighted average,
Total number of breakdowns / year = (0*3 + 1*3 + 2*3 + 3*5 + 4*5 + 5*1 ) / (3+3+3+5+5+1)
= 49 / 20
= 2.45 breakdown per year
Since each breakdown cost is estimated at $2200.
Cost of current maintenance policy = 2200 * 2.45 = $5390 per year
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