Great southern consultants groups computer system has been, Operation Management

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Great southern consultants groups computer system has been

Great Southern Consultants Group's computer system has been down several times over the past few months, as shown below.

Number of breakdowns 0 1 2 3 4

Monthly frequency 9 2 4 4 1

Each time the system is down, the firm loses an average of $400 in time and service expenses. They are considering signing a contract for preventive maintenance. With preventive maintenance, the system would be down on average only 0.5 per month. The monthly cost of preventive maintenance would be $200 a month. Which is cheaper, breakdown or preventive maintenance?

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