Great Southern Consultants Group's Computer System Has Been Down Several

question 123

Essay

Great Southern Consultants Group's computer system has been down several times over the past few months, as shown below.
$$\begin{array} { | l | l | l | l | l | l | } \hline \text { Number of breakdowns } & 0 & 1 & 2 & 3 & 4 \\\hline \text { Monthly frequency } & 9 & 2 & 4 & 4 & 1 \\\hline\end{array}$$
Each time the system is down, the firm loses an average of $400 in time and service expenses. They are considering signing a contract for preventive maintenance. With preventive maintenance, the system would be down on average only 0.5 per month. The monthly cost of preventive maintenance would be $200 a month. Which is cheaper, breakdown or preventive maintenance?

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Definitions:

Loan Balance

The amount of money that remains to be paid on a loan.

Student Loans

Money borrowed to pay for education expenses, which must be repaid with interest.

Principal

The initial sum of money borrowed in a loan or put into an investment, exclusive of any interest or dividends.

Student Loans

Loans offered to students to help cover post-secondary education expenses, which typically have favorable interest rates compared to other types of loans.