Question

Grear Tire Company has produced a new tire with an estimated mean lifetime mileage of 36,500 miles. Management also believes that the standard deviation is 5000 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.

a. For each tire sold, what is the expected cost of the promotion?

b. What is the probability that Grear will refund more than $50 for a tire?

c. What mileage should Grear set the promotion claim if it wants the expected cost to be $2

please show excel calculation :) thanks!

Answer #1

Grear Tire Company has produced a new tire with an estimated
mean lifetime mileage of 36,500 miles. Management also believes
that the standard deviation is 5000 miles and that tire mileage is
normally distributed. To promote the new tire, Grear has offered to
refund some money 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...

Grear Tire Company has produced a new tire with an estimated
mean lifetime mileage of 36,500 miles. Management also believes
that the standard deviation is 5,000 miles and that tire mileage is
normally distributed. To promote the new tire, Grear has offered to
refund some money 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...

Grear Tire Company has produced a new tire with an estimated
mean lifetime mileage of 36,500 miles. Management also believes
that the standard deviation is 5,000 miles and that tire mileage is
normally distributed. To promote the new tire, Grear has offered to
refund some money 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...

. Grear Tire Company has produced a new tire with an estimated
mean lifetime mileage of 36,500 miles. Management also believes
that the standard deviation is 5,000 miles and that tire mileage is
normally distributed. To promote the new tire, Grear has offered to
refund some money 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...

(All answers were generated using 1,000 trials and native Excel
functionality.)
Grear Tire Company has produced a new tire with an estimated
mean lifetime mileage of 36,500 miles. Management also believes
that the standard deviation is 5,000 miles and that tire mileage is
normally distributed. To promote the new tire, Grear has offered to
refund some money 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...

The Layton Tire and Rubber Company wishes to set a minimum
mileage guarantee on its new MX100 tire. Tests reveal the mean
mileage is 67900 with a standard deviation of 2050 miles and that
the distribution of miles follows the normal distribution. They
want to set the minimum guarantee mileage so that no more than 4
percent of tires will be replaced. What minimum guaranteed mileage
should Layton announce?

Suppose a tire manufacturer wants to set a mileage guarantee on
its new XB 70 tire. Tests revealed that the tire's mileage is
normally distributed with a mean of 47,900 miles and a standard
deviation of 2,050 miles. The manufacturer wants to set the
guaranteed mileage so that no more than 10% of the tires will have
to be replaced. What guaranteed mileage should the manufacturer
announce? a. 44,518 b.45,276 c.49,621 d.40,922

The operation manager at a tire manufacturing company believes
that the mean mileage of a tire is 20,138 miles, with a variance of
10,304,100. What is the probability that the sample mean would
differ from the population mean by less than 236 miles in a sample
of 171 tires if the manager is correct? Round your answer to four
decimal places.

A tire manufacturer states that a certain type of tire has a
mean lifetime of 60,000 miles. Suppose lifetimes are normally
distributed with standard deviation ơ = 3,500 miles.
Find the probability that if you buy one such tire, it will
last only 57,000 or fewer miles. If you had this experience, is it
particularly strong evidence that the tire is not as good as
claimed?
The tire manufacturer offers a money back guarantee if the tire
needs to be...

The Flamerock Tire company manufactures a particular tire model
that has a mean lifetime of 65,000 miles with a standard deviation
of 4500 miles. The lifetimes are normally distributed. What is the
probability that one of these tires selected at random will last
70,000 miles or more?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 24 minutes ago

asked 31 minutes ago

asked 39 minutes ago

asked 46 minutes ago

asked 54 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago