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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

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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 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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