Two word answers will be: MORE or LESS and ORIGINAL or NEW
A plumbing company sells plumbing supplies for commercial and residential applications. The company currently has only one supplier for a particular type of faucet. Based on historical data that the company has maintained, the company has assessed the rst accompanying probability distribution for the proportion of defective faucets that it receives from this supplier. This supplier charges the company $28.00 per unit for this faucet. Although the supplier will replace any defects free of charge, the plumbing company managers gure the cost of dealing with the defects is about $4.00 each. Complete parts a and b below. a Click the icon to view the rst probability distribution. a Click the icon to view the second probability distribution. a. Assuming that the plumbing company is planning to purchase 2,500 of these faucets from the supplier, what is the total expected cost to the plumbing company for the deal? (Refer to the rst probability distribution.) The total expected cost is $ . (Type an integer or a decimal.) b. Suppose that the plumbing company has an opportunity to buy the same faucets from another supplier at a cost of $27.00 per unit. However, based on its investigations, the company has assessed the second accompanying probability distribution for the proportion of defective faucets that will be delivered by the new suppliert Assuming that the defect cost is still $4.00 each and based on total expected cost for an order of 2,500 faucets, should the company buy from the new supplier or stick with its original supplier? Since the total expected cost for the new supplier is $ , which is 'V than that for the original supplier, the company should buy from the '7 supplier. (Type an integer or a decimal.) Data for Original Supplier Data for New Supplier Proportion Defective Probability Di Proportion Defective Probability 121 0.01 0.4 0.01 0.1 0.03 03 0.03 0.1 0.06 0.2 0.06 0.7 0.16 0.1 0.16 0.1