” If you are not willing to risk the usual you will have to settle for the ordinary.” Jim Rohn
A motorcycle company has the maintenance policy of replacing the tires of its 250 motorcycle fleet as the tires wear out. Top management wonders if they could save costs by changing the tires periodically at one time on its fleet of 250 motorcycles. The technique top management would find most useful is:
a) Probability Analysis
b) Learning Curve Techniques
c) Flexible Budgeting
d) Linear Programming
Probability gives a means of measuring numerically how likely an event will occur. It provides a way for us to quantify uncertainty. The probability technique can provide an estimate of the condition of the tires at a point in time, and the expected value of replacing the tires at once versus as they wear out.
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