28. Colour-Tech Ltd. has just started to hire out a total of 160 colour TV sets. According to market survey, the distribution of length of hire of sets is,

(a) Determine the number of new rentals needed each Year for the next four years to maintain the company's total rental at 160. Also determine the average length of the hire period and the average number of new rentals each Year.

(b) In an attempt to reduce their administrative overhead, the company is launching an advertising campaign aimed at their existing customers so as to encourage them to hire TV sets for longer periods. The company would regard their campaign successful if the following distribution of hiring was achieved in the long run:

If the administrative cost of arranging a hire is Rs 40, determine the maximum amount the company could spend on their advertisement campaign every Year.

Transcribed Image Text:

Length of hire (yrs.) 1 2 2 3 4 Percentage of hiring : 25 40 25 10