What is the firm should pay annually for maintenance program

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Assignment:

A machine has process time 12 minutes with CV 0.5. It fails on average every 6 hours and needs to be repaired. Time to repair is 45 minutes with a CV of 1.2. The company can elect to have a preventive maintenance program that will reduce the failure rate by 66.7%. Maintenance is conducted after every 60 jobs, and it lasts 60 minutes on average with a CV of 0.3. Jobs arrive every 15 minutes on average with a CV of 1.

1. What are the effective process time and CV of both options?

2. Annual production is based on an 8-hour shift per day with 250 working days per year. A one-minute reduction in CT is worth $0.50 per job. What is the most the firm should pay annually for this maintenance program?

Reference no: EM133237347

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