What is the economic advantage or disadvantage of


A group of 30 machines are repaired by a single repair person when they break down. Each machine yields a profit of $15 per hour while running. The mechanic costs the firm $150 per hour, including overheads. At the present time no preventative maintenance is used. It is proposed that one technician be employed to perform certain routine maintenance and adjustment tasks. This will cost $60 per hour but will reduce the service factor from 0.1 to 0.04. What is the economic advantage, or disadvantage, of implementing preventative maintenance?

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Financial Management: What is the economic advantage or disadvantage of
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