A manager is comparing the total maintenance (preventive plus breakdown) cost curves for two scenarios. The graphs have maintenance commitment on the x-axis and costs on the y-axis. Scenario A includes the direct breakdown maintenance costs, while Scenario B includes the "full" (direct and indirect) breakdown maintenance costs. Which of the following should the manager notice when going from Scenario A to Scenario B?
A) Total cost is decreased.
B) Optimal point is moved to the left.
C) Optimal point is moved to the right.
D) Preventive maintenance cost slope is increased.
E) None of these

Question

Quizplus · Accepted Answer

When going from Scenario A to Scenario B, the optimal point is moved to the right. This is because Scenario B includes the full breakdown maintenance costs, which are higher than just the direct breakdown maintenance costs in Scenario A. Therefore, more preventive maintenance is needed to minimize overall costs, leading to a shift in the optimal point to the right. None of the other options are correct, as total cost could increase or stay the same, the optimal point could move in either direction, and the preventive maintenance cost slope may not necessarily change.

A Manager Is Comparing the Total Maintenance (Preventive Plus Breakdown)