Euro Watch Company assembles expensive wristwatches and then sells them to retailers throughout Europe. The watches are assembled at a plant with two assembly lines. These lines are intended to be identical, but line I uses somewhat older equipment than line 2 and is typically less reliable. Historical data have shown that each watch coming off line 1, independently of the others, is free of defects with probability 0.98. The similar probability for line 2 is 0.99. Each line produces 500 watches per hour. The production manager has asked you to answer the following questions.

• She wants to know how many defect-free watches each line is likely to produce in a given hour. Specifically, find the smallest integer k (for each line separately) such that you can be 99% sure that the line will not produce more than k defective watches in a given hour.
• Euro Watch currently has an order for 500 watches from an important customer. The company plans to fill this order by packing slightly more than 500 watches, all from line 2, and sending this package off to the customer. Obviously, Euro Watch wants to send a few watches as possible, but it wants to be 99% sure that when the customer opens the package, there are at least 500 defect-free watches. How many watches should be packed?