About the preventive maintenance problem

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Reference no: EM13961356

A hospital has seven large identical heat pumps. If one of the heat pumps malfunctions, it could seriously impact hospital operations. If preventive maintenance is performed weekly, it costs $1200 to perform preventive maintenance (PM) on all seven of them. If one of the heat pumps breaks down between PM inspections, the average cost to the company of a breakdown is $2200. The historical data for the heat pumps is as follows:

Weeks between Preventive Maintenance Expected Number of Breakdowns between Preventive Maintenance

1 1.10

2 2.52

3 4.63

4 8.27

Now suppose that for each week that preventive maintenance is delayed, the cost to the company of a breakdown increases by $200 (for example, if preventive maintenance is every week, the cost of a breakdown is $2200 and if preventive maintenance is every two weeks, the cost of a breakdown is $2400, etc.) Based on the above information, what Preventive Maintenance policy do you recommend? Why?

Reference no: EM13961356

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