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 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 of 30,000. a) For each tire sold, what is the expected cost of the promotion? b) Please perform the simulation for 1000 times, what is the probability that Grear will refund more than $50 for a tire? please need very urgent with clear expalnation

Answer #1

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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 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...

. 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?

1: Tests of a new tire developed by a tire manufacturer led to
an estimated mean tread life of 67,350 miles and standard deviation
of 1,120 miles. The manufacturer will advertise the lifetime of the
tire (for example, a “50,000 mile tire”) using the largest value
for which it is expected that 98% of the tires will last at least
that long. Assuming tire life is normally distributed, find that
advertised value. Round your answer to two decimal places and...

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