Question 421071: establishing warranties, the manufacture wants to set the limits so that few will need repair at manufactures expense. on the other hand the warranty period must be long enough to make the purchase attractive to the buyer. for a new hdtv the mean number of months until repairs are needed is 36.84 with a std deviation of 3.34 months, where should the warranty limits be set so that only 10% of the hdtv's need repairs at the manufactures expense.
mean 36.84
std dev 3.34
How do i fugure the 10%?????
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! establishing warranties, the manufacture wants to set the limits so that few will need repair at manufactures expense. on the other hand the warranty period must be long enough to make the purchase attractive to the buyer.
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for a new hdtv the mean number of months until repairs are needed is 36.84 with a std deviation of 3.34 months, where should the warranty limits be set so that only 10% of the hdtv's need repairs at the manufactures expense.
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mean 36.84
std dev 3.34
How do I figure the 10%?????
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Find the z-value with a right tail of 10%
z = invNorm(0.9) = 1.2816
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Find the corresponding x-value using x = zs+u
x = 1.2816*3.34 + 36.84 = 41.12 months.
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Cheers,
Stan H.
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