Cost effectiveness of a preventive maintenance event

Reference no: EM1376319

Dr. Izobel Stevens is physician at the Westbury HMO, a New York City based medical facility serving the poor and indigent. Stevens is estimating the cost effectiveness of a preventive maintenance program, and believes that monthly downtime on the packaging line caused by equipment breakdown is related to the hours spend each month on preventive maintenance.

A. Write an equation to predict next months downtime using the variables D=downtime, M= preventive maintenance, t= time, a0= constant term, and a1=regression slope coefficient. Assume that downtime in the forecast (next) month decreases by the same percentage as preventive maintenance increased during the month preceding the current one.

B. If 40 hours were spent last month on preventive maintenance and this month's downtime was 500 hours, what should downtime be next month if preventive maintenance this month is 50 hours? Use the equation developed in part A.

Reference no: EM1376319

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