A Cutting Tool Has a Lifetime That Is Normally Distributed

question 48

Essay

A cutting tool has a lifetime that is normally distributed with an average life of 400 hours and a standard deviation of 50 hours.Present policy is preventive maintenance which requires changing all cutting tools at the end of each month.Current operations are two shifts per day and 7 working hours per shift.At 20 days per month,each cutting tool is in use 280 hours per month.(All cutting tools that fail are simply shut down until the end of the month sweep).The variable costs of replacement under the current policy are $8 per tool plus installation labor of $6 per tool.There are 40 tools in use.
-Management is also considering a third policy of remedial maintenance,which is to replace tools only on an as-failed basis.Costs are $8 per tool plus $12 per tool for installation labor.What is the estimated annual total cost of this policy?

Calculate the opportunity cost from given data and understand its implications.

Recognize the role of opportunity costs in determining comparative advantages.

Understand the effects of trade on consumption possibilities.

Differentiate between absolute and comparative advantages in real-world scenarios.

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Definitions:

Resistance Training

A form of physical activity that involves the use of resistance to induce muscular contraction, building the strength, anaerobic endurance, and size of skeletal muscles.

Endurance

The ability to sustain a physical or mental effort for a long period of time.

Assistive Devices

Assistive devices are tools and equipment designed to aid individuals in performing daily activities or tasks, enhancing their independence amidst disabilities or injuries.

Back Injuries

refer to damage or harm to the muscles, bones, or nerves in the back, often resulting from accidents, lifting, or sudden movements.