ABC company has recently developed a smart robotic system (SRS)used for disinfecting tasks as a part of prevention actions inbanks against COVID-19 infection. The SRS can freely roam in thebanking waiting halls scanning and spraying disinfectants to seats,rods, surfaces and tables of tellers on regular time intervals. SRShas two microchips in its brain. While scanning, one of these chipscollects data from the scanned surfaces and processes the data intoinformation and sends the processed information to the other chip.The second chip, in turn, controls and guides the SRS tosuccessfully complete the disinfecting tasks. The failure timedistribution of each chips is constant with rate of5X10-4 per hour. If any of the chips fails, SRS stopsfunctioning. ABC sells SRS for $500 with a one-year warranty. ABC’scustomer satisfaction policy dictates to refund fully for any SRSsystem that fails during this one-year warranty period. Inaddition, the Quality Assurance Department of ABC estimates theloss of goodwill of lost customers due to SRS failure beyond thewarranty period but before its expected life time as $14 per unit.However, any failure beyond the expected useful life of the SRS isnot expected to cause any loss of goodwill. ABC conducted anafter-sales survey and the results indicated that SRS is being usedfor almost 1.5 hours per day on the average as banks are not fullyoperating during the COVID-19 pandemic restrictions. According tothe sales reports, around 750 units of SRS are expected to be soldper year.
- What is the expected life of SRS system?
- How many of the 750 sold in a year are expected to be returnedduring the warranty period?
- What is the expected remaining lifetime of SRS that has been inoperation for 3 years?
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