A computer store sells computer packages. Since the package is so expensive, the company wants to advertise an impressive guarantee on its hardware. The guarantee policy will replace the unit if the computer fails during the guaranteed period. The research department has done tests shows that the mean life for the com puter is 36 months, with standard deviation of 12 months. The computer life is normally distributed. How long can the guarantee period be if the company does not want to replace the unit on more than 8% of the computer package?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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