DAYS TO REPAIR
The days to repair component was calculated by using the probability distribution of repair times given. This was used along with a set of random numbers based on 100 breakdowns a year. Then, a vlookup was used and the probability distribution per day to come up with the days to repair, which varies based on the random number that excel generates. The random number represents the probability of how many days it would take to repair the copier. TIME BETWEEN BREAKDOWNS
The time between breakdowns component was implemented by taking the formula for elapsed time between breakdowns as stated by Bernard Taylor III (2011). The formula is x=4√r1 where x equals the weeks between machine breakdowns and r1 equals the random number. Once the formula was entered into excel, the formula was calculated and based on the random number calculates the time between breakdowns. LOST REVENUE
The lost revenue was calculated by taking the median revenue to be earned in a given day and multiplying this by the calculated days to repair. Once this number was calculated, it was then calculated annually by taking the sum of the lost revenue column and dividing it by the cumulative time divided by 52 for 52 weeks in a year. This calculates the annual loss of revenue.
PUTTING IT ALL TOGETHER
The lost revenue for one year is $52,518.04 based on calculations in the excel spreadsheet. Confidence in this answer is very high based on research. The limits of the study are that the accurate revenue for the day was not exact so therefore an exact number cannot be determined for lost revenue. Also, the probability always stands a chance that the numbers are likely not to occur or to occur. Therefore, the numbers are not exact and could change at any time given the situation.
Taylor III, Bernard W. (2011). Introduction to Management Science. Upper Saddle River, NJ: Prentice Hall