Magic Video Games, Inc., sells an expensive video computer games package. Because the package is so expensive, the company wants to advertise an impressive guarantee for the life expectancy of its computer control system. The guarantee policy will refund full purchase price if the computer fails during the guarantee period. The research department has done tests which show that the mean life for the computer is 25 months, with a standard deviation of 7 months. The computer life is normally distributed. How long can the guarantee period be if the management does not want to refund the purchase price on more than 5% of the Magic Video packages? a. 25 months b. between 21 and 22 months c. between 13 and 14 months d. around 30 months plus or minus 5% e. around 1.645 months
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!
Magic Video Games, Inc., sells an expensive video computer games package. Because the package is so expensive, the company wants to advertise an impressive guarantee for the life expectancy of its computer control system. The guarantee policy will refund full purchase price if the computer fails during the guarantee period. The research department has
done tests which show that the mean life for the computer is 25 months, with a standard deviation of 7 months. The computer life is
Magic Video packages?
a. 25 months
b. between 21 and 22 months
c. between 13 and 14 months
d. around 30 months plus or minus 5%
e. around 1.645 months
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