A hospital has seven large identical heat pumps. If one of the heat pumps malfunctions, it could seriously impact hospital operations. If preventive maintenance is performed weekly, it costs $1200 to perform preventive maintenance (PM) on all seven of them. If one of the heat pumps breaks down between PM inspections, the average cost to the company of a breakdown is $2200. The historical data for the heat pumps is as follows:
Weeks between Preventive Maintenance Expected Number of Breakdowns between Preventive Maintenance
1...........................................................................1.10
2...........................................................................2.52
3...........................................................................4.63
4...........................................................................8.27
Now suppose that for each week that preventive maintenance is delayed, the cost to the company of a breakdown increases by $200 (for example, if preventive maintenance is every week, the cost of a breakdown is $2200 and if preventive maintenance is every two weeks, the cost of a breakdown is $2400, etc.) Based on the above information, what Preventive Maintenance policy do you recommend? Why?