Question

Tiger Island Fabricators, which builds offshore oil platforms, has been experiencing problems with its profiling machine, a computer-driven device that cuts the ends of pipe so that it can be welded to another pipe, as shown in the data below.


Number of breakdowns 0 1 2 3 4 5
Breakdown frequency 2 2 2 6 7 1

Each time a machine breaks down, the company loses about $3,000. If the company implements preventive maintenance, it will be able to reduce the number of breakdowns to one per month. Preventive maintenance costs would be $500 a month. Is preventive maintenance a cost-effective option?

Answer

This answer is hidden. It contains 337 characters.