26. An organisation is considering periodic replacement of 2,000 units of an item which follows sudden failure mechanism. It is now following a policy ofreplacing items as they fail at a cost of Rs 800 per item. The organisation feels that it can cut its per item replacement cost by Rs 150 using the periodic replacement method. BY making use of the information given in the table below, evaluate these alternatives and make a recommendation to this organisation:

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End of the month 1 2 3 Per cent of original items which fail 10 20 During the month 10 10 220 40 20 20 4 5 3 30 100 30