To determine the number of days needed to repair the copier when it is out of service, I first ran the RANDOM function to come up with several numbers between zero and one. I then took the number and plugged it into the following equation: six times the square root of r, where r equals the random number that was generated. From doing this I found the machine is bound to breakdown about three times. This information is show in columns A and B.
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I also used the given information for the repair time (days) and probability in the VLOOKUP function in order to come up with the number of days between breakdowns. On average, I found a total of 2.5 days interval between breakdowns. This information is found in columns C through E.
To generate the amount of revenue lost, I again used the RANDOM function, I then used those numbers in the following equation: six times r plus two, where I substituted r with the number generated using the RANDOM function. Depending on the number in column E I would repeat this equation. This information is found in columns F through K.
Putting it all Together
To come up with the total of how much it would cost, I then took the values in column k and multiplied them by .10 considering that’s how much JET Copies were planning to selling the copies for. After doing this multiplication, I summed up the values and found that a total of $26.65 would be lost for the week.
To Buy or Not To Buy
Seeing how the estimate amount of money lost is $26.65 a week, the company would only lose $1,365.54(26.65*52) a year. Due to the fact that the machine cost $8,000 I would recommend the company not buy the smaller copy machine as a back. In the end if they purchase the smaller machine it would be a waste