Js car buying policy is to always buy a new car, repair all breakdowns that occur during
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J’s car buying policy is to always buy a new car, repair all breakdowns that occur during the first T time units of ownership, and then junk the car and buy a new one at the first breakdown that occurs after the car has reached age T . Suppose that the time until the first breakdown of a new car is exponential with rate λ, and that each time a car is repaired the time until the next breakdown is exponential with rate μ.
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