A Manager Intends to Order a New Machine and Must

question 110

Essay

A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine.The parts cost $400 each and have no salvage value.The manager has compiled a frequency distribution for the probable usage of spare parts,as shown.For what range of shortage costs would stocking one spare part constitute an optimal decision?
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Definitions:

Future Orientation

The degree to which individuals or organizations plan for and consider future outcomes in their decision-making processes.

National Culture

The set of norms, behaviors, beliefs, and customs that exist within the population of a sovereign nation.

Geert Hofstede

A Dutch social psychologist known for his research on the comparisons of cultures across nations, leading to the development of his cultural dimensions theory.

Human Resources Management (HRM)

The strategic approach to the effective management of people in an organization, ensuring their contribution towards the achievement of the organization's goals.