Question

A company that produces an expensive stereo component is considering offering a warranty on the component. Suppose the population of lifetimes of the components is a normal distribution with a mean of 84 months and a standard deviation of 9 months. If the company wants no more than 2% of the components to wear out before they reach the warranty date, what number of months should be used for the warranty? (Enter your answer as a whole number.)

Answer 1

Answer:

Warranty of 66 months.

Step-by-step explanation:

Problems of normally distributed samples are solved using the z-score formula.

In a set with mean $\mu$ and standard deviation $\sigma$, the zscore of a measure X is given by:

$Z = \frac{X - \mu}{\sigma}$

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

In this problem, we have that:

$\mu = 84, \sigma = 9$

If the company wants no more than 2% of the components to wear out before they reach the warranty date, what number of months should be used for the warranty?

Only the lowest 2% will be replaced, so the warranty is the value of X when Z has a pvalue of 0.02. So it is X when Z = -2.055.

$Z = \frac{X - \mu}{\sigma}$

$-2.055 = \frac{X - 84}{9}$

$X - 84 = -2.055*9$

$X = 65.5$

Warranty of 66 months.