Get premium membership and access questions with answers, video lessons as well as revision papers.

Grear Tyre Company has just developed a new steel-belted radial tyre that will be sold through a chain of discount stores. Because the tyre is a...

      

Grear Tyre Company has just developed a new steel-belted radial tyre that will be sold through a chain of discount stores.
Because the tyre is a new product, the company‟s management believes that the mileage guarantee offered
with the tyre will be an important factor in the consumer acceptance of product. Before finalizing the tyre mileage guarantee policy, the actual road test with the tyres shows that the mean tyre
grear.png
data collected indicate that a normal distribution is a reasonable assumption.
Required:
i) Grear Tyre Company will distribute the tyres if 20 per cent of the tyres manufactured can be expected
to last more than 40,000 kilometers. Should the company distribute the tyres?
ii) The company will provide a discount on a new set of tyres if the mileage on the original tyres does not exceed the mileage stated on the guarantee.
What should the guarantee mileage be if the company wants no more than 10% of the tyres to be
eligible for the discount?

  

Answers


Mutiso
grear712212.png
Mutiso answered the question on December 7, 2018 at 11:13


Next: The past records of Salama Industries indicate that 4 out of 10 of the company?s orders are for export. Further, their records indicate that 48 percent...
Previous: Explain briefly some of the advantages of the standard normal distribution

View More CPA Quantitative Analysis Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions