Consider a Product That Is "Settled In

question 119

Essay

Consider a product that is "settled in." Its MTBF distribution has been found to be normal with a mean of 1,000 hours and a standard deviation of 250 hours. What is the probability of a breakdown before 750 hours?
Before 500 hours?
Would you prefer a policy of preventive maintenance, or a policy of breakdown maintenance, on this product?
Explain your choice.

---

Definitions:

Direct Expense

A cost that can be directly attributed to the production or sale of specific goods or services in a business.

Indirect Expense

Costs that are not directly tied to a specific product or service but are necessary for the overall operation of a business, such as utilities or rent.

Rent

The cost incurred for using properties or equipment owned by another party for a specified period.

Direct Expense

Costs that can be directly tied to the production of specific goods or servicing of specific services, such as raw materials and labor.