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Should you choose the automated lab

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Question - You are comparing replacement of the current lab, which has a cost function of C = 200,000 + 25 x Q, with an automated C = 300,000 + 20 x Q. Doing so would reduce the error rate from 1.5 percent to 1 percent. Your volume is expected to be 18,000 tests per year. Should you choose the automated lab? Briefly explain your logic.

Reference no: EM132673084

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