1. The Ecstasy Inn motel has 100 television sets in its rooms. The manager has an opportunity...
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1. The Ecstasy Inn motel has 100 television sets in its rooms. The manager has an opportunity to sign a maintenance contract that calls for an annual payment of $12 per television set. The contract will provide preventive maintenance and adjustments to the sets at 6-month intervals. Currently the average repair cost is $25 each time a set is repaired or adjusted. The probabilities of breakdown at various intervals after a repair are given in the following table.
a. Should the manager purchase the maintenance service as offered at 6-month intervals?
b. Should he attempt to obtain service at other intervals?
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Related Book For 
Operations Management Providing Value In Goods And Services
ISBN: 9780030262074
3rd Edition
Authors: Dilworth, James B
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