Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Model File Available: Download GrearIMS.xlsx Grear Tire Company has produced a new tire with an estimated mean lifetime mileage of 34,500 miles. Management also believes

Model File Available: Download GrearIMS.xlsx Grear Tire Company has produced a new tire with an estimated mean lifetime mileage of 34,500 miles. Management also believes that the standard deviation is 4,500 miles and that tire mileage is normally distributed. To promote the new tire, Grear has offered to refund a portion of the purchase price if the tire fails to reach 30,000 miles before the tire needs to be replaced. Specifically, for tires with a lifetime below 30,000 miles, Grear will refund a customer $1 per 100 miles short of 30,000. Construct a simulation model to answer the following questions. (Use at least 1,000 trials.) (a) For each tire sold, what is the average cost of the promotion (in $)? (Round your answer to two decimal places.) $ (b) What is the probability that Grear will refund more than $25 for a tire? (Round your answer to three decimal places.)

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

Step: 3

blur-text-image

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

An Introduction To Management Science Quantitative Approaches To Decision Making

Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran

16th Edition

0357715462, 978-0357715468

More Books

Students also viewed these General Management questions

Question

Create a decision tree for Problem 12.

Answered: 1 week ago