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 $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: D Number of breakdowns Number of years in which breakdowns occurred a) The expected number of breakdowns per year with station employees performing maintenance = 2.48 breakdowns per year (round your response to two decimal places). b) The cost of the current maintenance policy = $5942.86 (round your response to the nearest whole number). c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service is $5,200 per year. Given this information, for maintenance the most economical option. 0 1 2 3 4 4 2 3 5 6 5 1 option is the in-house outsourced

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Hi, I need help finding the correct answer to part C of this Operations Management problem. The two possible answer options are shown onscreen. Thanks!

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 $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history:
D
Number of breakdowns
0
Number of years in which breakdowns occurred 4 2
a) The expected number of breakdowns per year with station employees performing maintenance = 2.48 breakdowns per year (round your response to two decimal places).
b) The cost of the current maintenance policy = $ 5942.86 (round your response to the nearest whole number).
c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service
most economical option.
1 2 3 4 5
3 5 6 1
$5,200 per year. Given this information, for maintenance the
option is the
in-house
outsourced
Transcribed Image Text: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 $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: D Number of breakdowns 0 Number of years in which breakdowns occurred 4 2 a) The expected number of breakdowns per year with station employees performing maintenance = 2.48 breakdowns per year (round your response to two decimal places). b) The cost of the current maintenance policy = $ 5942.86 (round your response to the nearest whole number). c) This manufacturer will guarantee repairs on any and all failures as part of a service contract. The cost of this service most economical option. 1 2 3 4 5 3 5 6 1 $5,200 per year. Given this information, for maintenance the option is the in-house outsourced
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