question archive A manufacturer of MP3 players purchases major electronic components as modules
A manufacturer of MP3 players purchases major electronic components as modules
Subject:EconomicsPrice:2.88 Bought3
A manufacturer of MP3 players purchases major electronic components as modules. The reliabilities of components differ by supplier (see below diagram). Suppose that the configuration of the major components is given by: The components that can be purchased from three different suppliers. The reliabilities of the components are as follows:
| Component | Supplier 1 | Supplier 2 | Supplier 3 |
|---|---|---|---|
| A | .97 | .92 | .95 |
| B | .85 | .90 | .90 |
| C | .95 | .93 | .88 |
Transportation and purchasing considerations require that only one supplier be chosen. Which one should be selected if the MP3 player is to have the highest possible reliability?
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Supplier 1 reliability
R1 = A(1-(1-B)(1-C))
R1 = 0.97(1-(1-0.85)(1-0.95))
R1 = 0.963
Supplier 2 reliability
R2 = A(1-(1-B)(1-C))
R2 = 0.92((1-0.90)(1-0.93))
R2 = 0.914
Supplier 3 reliability
R3 = A(1-(1-B)(1-C))
R3 = 0.95((1-0.90)(1-0.88))
R3 = 0.939
Seller 1 should be selected because of higher reliability.
