DuLarge Marine manufactures diesel engines for shrimp trawlers and other small commercial boats. One of their CNC machines has caused several problems. Over the past 30 weeks, the machine has broken down as indicated below. Each time the machine breaks down, the firm loses an average of $2,000 in time and repair expenses. If preventive maintenance were implemented, it is estimated that an average of only one breakdown per week would occur. The cost of preventive maintenance is $1,000 per week. What is the weekly total maintenance cost of the best program?

Question

DuLarge Marine manufactures diesel engines for shrimp trawlers and other small commercial boats. One of their CNC machines has caused several problems. Over the past 30 weeks, the machine has broken down as indicated below. Each time the machine breaks down, the firm loses an average of $2,000 in time and repair expenses. If preventive maintenance were implemented, it is estimated that an average of only one breakdown per week would occur. The cost of preventive maintenance is $1,000 per week.  What is the weekly total maintenance cost of the best program?

Quizplus · Accepted Answer

Option B, the weekly total maintenance cost of $3,000, is the best choice since it offers the lowest total cost compared to the cost of doing nothing or implementing preventive maintenance only.

If the firm does nothing, the total cost over 30 weeks would be:

30 breakdowns x $2,000 per breakdown = $60,000

If preventive maintenance were implemented, the weekly cost would be:

Preventive maintenance cost + (1 breakdown x $2,000) = $1,000 per week + $2,000 per week = $3,000 per week

Over 30 weeks, the total cost would be:

30 weeks x $3,000 per week = $90,000

Therefore, implementing preventive maintenance with a cost of $1,000 per week to reduce breakdowns to one per week and incur $2,000 per breakdown is the best choice since it would result in a total cost of $90,000 ($3,000 per week x 30 weeks), which is lower than the cost of doing nothing ($60,000) or implementing preventive maintenance only ($1,000 per week x 30 weeks = $30,000).

DuLarge Marine Manufactures Diesel Engines for Shrimp Trawlers and Other