Epsilon Manufacturing Company Makes a Specialized Electronic Product Used in the Automotive

question 74

Multiple Choice

Epsilon Manufacturing Company makes a specialized electronic product used in the automotive industry.This product has 4 components,each of which could be defective.So the total number of defects of this product can be 0,1,2,3,or 4.The following table provides the probabilities of the number of defects: The mean number of defects is _______.

• A) .75
• B) .77
• C).80
• D) .85
• E) .87

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Definitions:

Carrying Cost

The total cost of holding inventory, including storage, handling, depreciation, and opportunity costs, over a certain period of time.

Fixed Cost

A fixed cost is an expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Board Game

A tabletop game that involves counters or pieces moved or placed on a pre-marked surface or "board," according to a set of rules.

Break-Even Default Percent

A financial metric indicating the percentage of default at which an investment breaks even, factoring in recovery rates and the probability of default.