A component must have reliability of .9925. Two technologies are available for this component: one produces a component with .999 reliability at a cost of $2000. Another produces a component with .73 reliability at a cost of $450

Which is cheaper: one high quality component or a parallel set of inferior components? (Hint: for the inferior components, you first need to determine the number of them that would be needed to ensure overall reliability of .9925.)

First, determine how many of the 0.73 reliable components are needed: 2: 0.9271 3: 0.980317 4: 0.994686 Four are needed, which will cost $1800. This is cheaper than the $2000 single high-quality component.