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Topic History of : EMV question

Max. showing the last 6 posts - (Last post first)
8 months 3 weeks ago #20754

Jaydip Chakrabarti

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I think $6.42M is correct because it calculates not only the testing cost for all 500 units but also takes into account the reassemble cost of passed units ( 480 units ) plus the cost of repair & reassemble of 4% failed units ( 20 units )
9 months 7 hours ago #20627


's Avatar

Your calculations are wrong. e.g. 96% * 500 * 10000 = 4.800,
5 years 10 months ago #5196

Ahmed Amin

Ahmed Amin's Avatar

Hi Farid,

I think the correct answer is $6.42 million the details as below:

1- 96% pass the test = cost of testing = 96% * 500 unit * 10k = 5M
2- cost to resemble passed units = 96% * 500 unit * 2k = .96 M
3- cost to resemble and repair each failed unit after the factory test = .04* 500 unit * 23k = .46 M

so the total cost of to conduct the tests is 5M+.96M+.46M = 6.42 million

and the cost of not performing the test is "the cost to repair and reinstall each failed unit in the field" which = 0.04% * 500 * 350 K = 7 million.

so in this case conducting the tests would be the best option (but this is not part of the question :) )

other thought would be helpful as well.
5 years 11 months ago #5175

Farid Hadj-Hamou

Farid Hadj-Hamou's Avatar

Of course - I found this question on the Linkedin forum

Let me know if it is ok to post the questions I found difficult to resolve - I can surely provide the sources as well.

Thank you
5 years 11 months ago #5174

Cornelius Fichtner

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Hello Farid,

Please state where you originally found this question. We want to give credit to the original author with all questions posted in our forum.

Thank you!
5 years 11 months ago #5173

Farid Hadj-Hamou

Farid Hadj-Hamou's Avatar


Can someone help me resolve this question? how do I tackle these types of questions on the PMp exam?

You are trying to determine whether or not to conduct 100% final system tests of 500 ground-based radar units at the factory. The historical radar field failure rate is 4%; the cost to test each unit in the factory is $10,000; the cost to reassemble each passed unit after the factory test is $2,000; the cost to repair and reassemble each failed unit after factory test is $23,000; and the cost to repair and reinstall each failed unit in the field is $350,000. Using decision tree analysis, what is the expected value if you decide to conduct these tests?

$5.5 million
$5.96 million
$6.42 million
$7 million

Thank you


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