Chapter4Q14answer[1]

Chapter4Q14answer[1] - = 0.6 × 0.3 × 0.6 = 0.108 p (lost...

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Chapter 4 Question 14 0.4 Lost rev ($) No breakdowns 0 0.6 Av. rev lost per hour = $40 40 0.7 0.3 Repair time = 1 hour Av. rev lost per hour = $50 50 0.1 Av. rev lost per hour = $60 0.6 60 One breakdown 0.6 Av. rev lost per hour = $40 80 0.3 0.3 Repair time = 2 hours Av. rev lost per hour = $50 100 0.1 Av. rev lost per hour = $60 120 The tree shows that: p (lost revenue = $0) = 0.400 p (lost revenue = $40) = 0.6 × 0.7 × 0.6 = 0.252 p (lost revenue = $50) = 0.6 × 0.7 × 0.3 = 0.126 p (lost revenue = $60) = 0.6 × 0.7 × 0.1 = 0.042 p (lost revenue = $80)
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Unformatted text preview: = 0.6 × 0.3 × 0.6 = 0.108 p (lost revenue = $100) = 0.6 × 0.3 × 0.3 = 0.054 p (lost revenue = $120) = 0.6 × 0.3 × 0.1 = 0.018 (continued. .. b) Lost revenue per day ($) Probability Lost revenue per day × Probability 0 0.400 0 40 0.252 10.08 50 0.126 6.30 60 0.042 2.52 80 0.108 8.64 100 0.054 5.40 120 0.018 2.16 Expected lost revenue per day = $35.10 On average, in the long run, breakdowns will lead to the loss of $35.10 of revenue per day....
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Chapter4Q14answer[1] - = 0.6 × 0.3 × 0.6 = 0.108 p (lost...

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