Question 201518: If a tire has a mean mileage of 60,000 miles and a standard deviation of 2,000, and the company doesn't want to have a replacement expense of more than 4%, what is the minimum guaranteed mileage for the tire?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! If a tire has a mean mileage of 60,000 miles and a standard deviation of 2,000, and the company doesn't want to have a replacement expense of more than 4%, what is the minimum guaranteed mileage for the tire?
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Draw the normal curve with center at 60,000.
Note that sigma = 2000
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Mark a point in the left tail that has 4$ of the miles driven to the left.
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Find the z-value of that point using your z-chart or calculator.
I get InvNorm(0.04) = -1.7507
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Now find the "raw score" corresponding to that z-score using
x = z*sigma + mu
x = -1.7507*2000 + 60000
x = 56498.63 miles
That is the number of miles for which they should warrant the tires.
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Cheers,
Stan H.
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