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Auto batteries have an average life of 2.9 years. Battery life is normally distributed with a mean of 2.9 years and a standard deviation of 0.48 year.

The batteries are warranted to operate for a minimum of 2 years. If a battery fails within the warranty period, it will be replaced with a new battery at no charge. The company sells and installs the batteries. Also, the usual $3 installation charge will be waived.

a. What percentage of batteries would you expect to fail before the warranty period expires?

(Round your z value to 2 decimal places. Round probabilities to 4 decimal places. Round your final answer to 2 decimal places. Omit the "%" sign in your response.)

Percentage __________ %

b. A competitor is offering a warranty of 26 months on its premium battery. The manager of this company is toying with the idea of using the same battery with a different exterior, labeling it as a premium battery, and offering a 26-month warranty on it.

What percentage of the batteries would you expect to fail before this new warranty period expires?

(Round your z value to 2 decimal places. Round probabilities to 4 decimal places.Round your final answer to 2 decimal places. Omit the "%" sign in your response.)

Attachment:- Tables.rar

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92759295

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