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1) ACME, Inc. sells an expensive video game system. The research department has done tests that show that the mean life for the system is
1) ACME, Inc. sells an expensive video game system. The research department has done tests that show that the mean life for the system is 30 months with standard deviation of 4 months. The computer life is normally distributed. Thus, based on the Empirical Rule, 84% would fail by 34 months, 50% by 30 months, 16% by 26 months, 2.5% by 22 months, etc. The guarantee policy will refund the full purchase price if the system fails during the guarantee period. a) Label with mean life N ( 30 , 4 ) 75% 14% numbers. - 3 X 18 22 24 30 34 38 42 b) How long can the guarantee period be if management does not want to refund the purchase price on more than 7% of the systems? Do by hand: use TABLE A-2 to determine the z value and then appropriate formula(s). c) Check b) using the appropriate calculator function. d) What is the probability that a system will last more than 3 years? Use any method. ST
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