If QuickStart does not want to make refunds for more than 7% of its batteries under the full-refund guarantee policy, for how long should the company guarantee the batteries (to the nearest month) ?

Question

Business

Maleah Mcclain

24 May, 17:56

If QuickStart does not want to make refunds for more than 7% of its batteries under the full-refund guarantee policy, for how long should the company guarantee the batteries (to the nearest month) ?

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Answers (1)

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Ronnie Bates · Answer 1

Answer: quickstart batteries will need to be guaranteed for 26 months

Explanation:

the question is incomplete to calculate guarantee period given the maximum refund percentage of 7% we need the mean average life of Quick start batteries and a standard deviation. Let us assume that the mean average life of quickstart batteries is 36 months and standard deviation is 7 months.

P (Z < z*) = 0.07 has a z * = - 1.48 [from the Standard Normal table]

Answer = 36 + (-1.48) (7) = 25.64 = 26 months or approximately 35 months