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ABSTRACT
James, Ernie and Terri decided to open a copy center to fulfill a need for closer access to copy machines in their community. After buying their first copier, they learned some of the pitfalls associated including the breakdown of the machinery and the potential loss of revenue associated with the breakdown. Before borrowing the additional funds needed to purchase a backup copier, they wanted to get a reasonable estimate of what the potential loss of revenue would be to determine if buying the backup copier made sense. This paper will describe the steps necessary to run a simulation of weeks between one equipment failure and another, the downtime in days due to repair and the lost revenue over a year period of time due to the simulated equipment failure.
METHODOLOGY
The first step in this process is simulating the time between breakdowns. Without explicit information on frequency of breakdowns, some assumptions have to be made. In this case, the assumption is between 0 and 6 weeks with the probability of a breakdown increasing as time between breakdowns increases. I was given a probability distribution graph that showed time in weeks on the x axis from 0 to 6 with a y value of 0.33 where x = 6. The graph looked something like this:

From that information, I calculated that area under the line to ensure that this could be considered a continuous distribution function. For this to be true, the area under the curve must equal 1. The calculation looks like this ½bh = ½*1/3*6 =1/6*6/1 or 1. Since we determined this is a continuous probability distribution function (CDF), we can apply the calculation f(x) = x/18, 0<= x <=6 weeks to determine the weeks between equipment failures. The translation of that function for use in Excel was x=6*SQRT(r), where r is a random number between 0 and 1. I generated pseudorandom numbers for use