The fire department has a number of failures with its oxygen masks and is evalua

Question

The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing preventive maintenance to the manufacturer. Because of the risk associated with a failure, the cost of each failure is estimated at $2,400. The current maintenance policy (with station employees performing maintenance) has yielded the following history: Number of breakdowns Number of years in which breakdowns occurred 0 1 23 4 5 a) The expected number of breakdowns per year with station employees performing maintenance-breakdowns per year (round your response to two decimal places).

Explanation / Answer

Expected number of breakdown = SUMPRODUCT (Breakdowns, Number of years)/Number of years

= (0*5 + 1*2 + 2*3 +3*4 + 4*3 + 5*1)/(5+2+3+4+3+1) = 37/18 = 2.06 breakdowns per year

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