1. For a particular piece of equipment, the frequency distribution of monthly breakdowns is as follows; 0 breakdowns has a probability of .4, 1 breakdown has a probability of .3, 2 breakdowns have a probability of .15, 3 breakdowns have a probability of .1 and 4 breakdowns have a probability of .05. The cost of a breakdown is $2,000 and the cost of the preventive maintenance program is $2,000 per month. If the preventive maintenance program is adopted, the probability of equipment breakdown is negligible. How much better off will the company be if it adopts the preventive maintenance program?

A) $100 worse off

B) $200 worse off

C) $100 better off

D) $200 better off

2. You manage a facility that was designed to produce 700 battery chargers per day but has been limited to 600 chargers per day because of set up times and maintenance. What is the utilization of this facility? (round to two decimal places)

a) 116%

b) 75%

c) 86%

d) 90%