The Frequency of Breakdown of a Piece of Equipment Per

Essay

The frequency of breakdown of a piece of equipment per month is shown in the following table. The cost of a breakdown is $1,000, and the cost of preventive maintenance is $2,000 per month. Assume that the equipment breakdown can be avoided if preventive maintenance is performed. Should the manager use preventive maintenance, or would it be better to fix the equipment when it breaks down?
$$\begin{array} { l c c c c c c } \text { Number of breakdowns } & 0 & 1 & 2 & 3 & 4 & 5 \\\text { Probability } & 0.10 & 0.15 & 0.20 & 0.30 & 0.15 & 0.10\end{array}$$
[COMP: Delete zeros before decimals in table.]