Tiger Island Fabricators, which builds offshore oil platforms, has been experiencing problems with its profiling machine, a computer-driven device that cuts the ends of pipe so that it can be welded to another pipe, as shown in the data below.
$$\begin{array} { | l | l | l | l | l | l | l | }
\hline \text { Number of breakdowns } & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \text { Breakdown frequency } & 2 & 2 & 2 & 6 & 7 & 1 \
\hline
\end{array}$$
Each time a machine breaks down, the company loses about $3,000. If the company implements preventive maintenance, it will be able to reduce the number of breakdowns to one per month. Preventive maintenance costs would be $500 a month. Is preventive maintenance a cost-effective option?

Question

Tiger Island Fabricators, which builds offshore oil platforms, has been experiencing problems with its profiling machine, a computer-driven device that cuts the ends of pipe so that it can be welded to another pipe, as shown in the data below.
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Number of breakdowns } & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \text { Breakdown frequency } & 2 & 2 & 2 & 6 & 7 & 1 \
\hline
\end{array}$$ 
Each time a machine breaks down, the company loses about $3,000. If the company implements preventive maintenance, it will be able to reduce the number of breakdowns to one per month. Preventive maintenance costs would be $500 a month. Is preventive maintenance a cost-effective option?

Quizplus · Accepted Answer

The Answer of Tiger Island Fabricators, which builds offshore oil platforms, has been experiencing problems with its profiling machine, a computer-driven device that cuts the ends of pipe so that it can be welded to another pipe, as shown in the data below.
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Number of breakdowns } & 0 & 1 & 2 & 3 & 4 & 5 \
\hline \text { Breakdown frequency } & 2 & 2 & 2 & 6 & 7 & 1 \
\hline
\end{array}$$ 
Each time a machine breaks down, the company loses about $3,000. If the company implements preventive maintenance, it will be able to reduce the number of breakdowns to one per month. Preventive maintenance costs would be $500 a month. Is preventive maintenance a cost-effective option?

Tiger Island Fabricators, Which Builds Offshore Oil Platforms, Has Been