It costs ($ 50) to find out whether a spare part required for repairing a failed device

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It costs $\$ 50$ to find out whether a spare part required for repairing a failed device is faulty or not. Installing a faulty spare part causes damage of $\$ 1000$.

Is it on average more profitable to use a spare part without checking if

(1) $1 \%$ of all spare parts of that type,

(2) $3 \%$ of all spare parts of that type, and

(3) $10 \%$ of all spare parts of that type are faulty?

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Applied Probability And Stochastic Processes

ISBN: 9780367658496

2nd Edition

Authors: Frank Beichelt

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Question Posted: Apr 26, 2024 04:00 PM

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It costs ($ 50) to find out whether a spare part required for repairing a failed device

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Applied Probability And Stochastic Processes

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