Answer:
A. $0.013 per tire
B.0.0107
C.24436.3956009929
Explanation:
Grear Tire Company
a.
Meal lifetime mileage $36,500
Standard deviation of mileage $5,000
Observed miles 30,000 miles
100 miles failed $1.00
Hence :
= (36,500 – 30,000) / 5000= 1.3
Cost of production
100 miles=$1.00
1.3 * 1 / 100
= $0.013 per tire
b.
P (z <25000 -36500/5000
P z <-11500/5000
z <-2.3
Hence:
1-0.9893
=0.0107
Therefore the Probability that gear will refund more than $50.00 per tire is: 0.0107
c.
The mileage that should Grear set the promotion claim if it wants the expected cost to be $2 is 24436.3956009929