Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Appliances Unlimited (AU) sells refrigerators. Any refrigerator that fails before it is three years old is replaced for free. Of all refrigerators, 3% fail during

Appliances Unlimited (AU) sells refrigerators. Any refrigerator that fails before it is three years old is replaced for free. Of all refrigerators, 3% fail during their first year of operation; 5% of all one-year-old refrigerators fail during their second year of operation; and 7% of all two-year-old refrigerators fail during their third year of operation.

a. Use simulation to estimate the fraction of all refrigerators that will have to be replaced.

b. It costs $500 to replace a refrigerator, and AU sells 10,000 refrigerators per year. If the warranty period were reduced to two years, how much per year in replacement costs would be saved?

Provide me 2 Excel sheet describing all the formulas and using @risk software.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Algebra

Authors: Margaret L. Lial, John Hornsby, David I. Schneider, Callie Daniels

12th edition

134697022, 9780134313795 , 978-0134697024

More Books

Students also viewed these Mathematics questions