A large computer installation contains 2,000 components of identical nature which are subject to failure as per probability distribution that follows

Components which fail have to be replaced for efficient functioning of the system. If they are replaced as and when failures occur, the cost of replacement per unit is Rs 45. Alternatively, if all components are replaced in one lot at periodic intervals and individually replace only such failures as occur between group replacements, the cost of component replaced is Rs 15.

(a) Assess which policy of replacement would be economical.

(b) If group replacement is economical at current costs, then assess at what cost of individual replacement would group replacement be uneconomical.

(c) How high can the cost per unit in group replacement be to make a preference for individual replacement policy?

Transcribed Image Text:

Month End 1 2 w 3 4 5 % Failure to Date 10 25 50 80 100