Compute the maximum net profit per hour of production

Reference no: EM133637768

Question: A food packaging facility is able to vacuum-pack their cheese at a rate of one pack per 10 seconds. Each package of cheese results in a profit of $8. The suction mechanism on the packing machine fails occasionally, but we can improve its performance by routine inspections followed by minor tune-ups. The failure rate of the vacuum machine is known to be ??(??) = 0.0063/?? where ?? is the number of inspections per hour. An inspection takes half an hour; the technician who performs the labor is paid $50/hour. A repair takes 3 hours to perform, requiring the same technician's labor, as well as $450 in replacement parts. (a) Determine the inspection interval that maximizes the net profit of the packaging facility (b) Compute the maximum net profit per hour of production with your result from part (a) (c) What is more costly for this facility: the inspections or the failures? Why?

Reference no: EM133637768

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