The cost of a spare engine purchased now is $400,000, whereas the cost of a spare engine purchased at a later date is $900,000.

Spares must always be supplied if they are demanded, and unused engines will be scrapped when the airplanes become obsolete. Holding costs and interest are to be neglected. From these data, the total costs (negative payoffs) have been computed as follows:

Determine the optimal action under Bayes’ decision rule.