Compute the long-run replacement rate

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Mr. Smith replaces the battery in his car as soon as it dies. Suppose the battery lifetimes are iid Erlang with parameters k = 3 and λ=1 (per year). Compute the long-run replacement rate if Mr. Smith replaces the battery upon failure

The lifetime of a machine is an Erlang random variable with parameters k = 2 and λ=0.2 (per day). When the machine fails, it is repaired. The repair times are Exp(µ) with mean 1 day. Suppose the repair costs $10 per hour. The machine produces revenues at a rate of $200 per day when it is working. Compute the long-run net revenue per day.

Reference no: EM133078944

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