The probability that equipment used in a hospital lab will need recalibration is given in the following table. A service firm is willing to perform maintenance and do any necessary calibrations for a fee of $$550$ per month. Recalibration costs $$325$ per time. $($Round the answer of "Expected cost of recalibration" to nearest whole number.$)$

Number of Recalibrations $01234$

Probability of Occurrence $\mathrm{.}10\mathrm{.}20\mathrm{.}25\mathrm{.}25\mathrm{.}20$

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Which approach would be most cost$-$effective, recalibration as needed or the service contract?

multiple choice

Service contract

Recalibration

Both methods are the sameThe probability that equipment used in a hospital lab will need recalibration is given in the following table. A service firm is willing to perform maintenance and do any necessary calibrations for a fee of $$550$ per month. Recalibration costs $$325$ per time. $($Round the answer of "Expected cost of recalibration" to nearest whole number.$)$

Number of Recalibrations $01234$

Probability of Occurrence $\mathrm{.}10\mathrm{.}20\mathrm{.}25\mathrm{.}25\mathrm{.}20$

Click here for the Excel Data File

Which approach would be most cost$-$effective, recalibration as needed or the service contract?

multiple choice

Service contract

Recalibration

Both methods are the same