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A tire manufacturer warranties its tires to last at least 22,000 kilometres (km) or you get a new set of tires. In its experience, a
A tire manufacturer warranties its tires to last at least 22,000 kilometres (km) or "you get a new set of tires". In its experience, a set of these tires lasts on average 26,000 km with standard deviation of 5000 km. Assume that the lifespan of each tire is independent and identically normally-distributed. The profit for selling a tire is $200. The cost of replacing a tire later as promised by the warranty, if necessary, is $400. (a) Estimate the probability that the manufacturer will lose money from selling a tire. (b) Estimate the probability that the manufacturer will lose money from selling 60 tires
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