Concept explainers
Auto batteries have an average life of 2.7 years. Battery life is
a. What percentage of batteries would you expect to fail before the warranty period expires?
b. A competitor is offering a warranty of 30 months on its premium batten. The manager of this company is toying with the idea of using the same batten with a different exterior, labeling it as a premium battery, and offering a 30-month warranty on it. How much more would the company have to charge on its “premium” batten to offset the additional cost of replacing batteries?
c. What other factors would you take into consideration besides the price of the battery?
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Operations Management
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