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Sagot :
Answer:
The best alternative is to use Basic Fastener.
Explanation:
The aircraft company has 2 alternatives. The first alternative is super light which has repair cost of $165k when the probability is considered. There are three possible situations where repair cost can be high, moderate or low. The repair cost calculation with probability is as follows:
300,000 * 0.3 + 120,000 * 0.5 + 75,000 * 0.2 = $165,000
The repair cost for Basic faster is $125,000.
It is suitable for the company to use basic fastener as it has proven records of performance and also its repair cost is lower than Super fastener.
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