From actual road tests with the tires, Hankook Tires estimated that the mean tire mileage is 36,500 miles and that the standard deviation is 5000 miles. Data is normally distributed. What percentage of the tires can be expected to last more than 40,000 miles? Assume that Hankook Tires is considering a guarantee that will provide a discount on replacement tires if the original tires do not provide the guaranteed mileage. What should the guarantee mileage be if the company wants no more than 10% of the tires to be eligible for the discount guarantee?
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!
From actual road tests with the tires, Hankook Tires estimated that the
- What percentage of the tires can be expected to last more than 40,000 miles?
- Assume that Hankook Tires is considering a guarantee that will provide a discount on replacement tires if the original tires do not provide the guaranteed mileage. What should the guarantee mileage be if the company wants no more than 10% of the tires to be eligible for the discount guarantee?
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