Question

If QuickStart does not want to make refunds for more than 7% of its batteries under the full-refund guarantee policy, for how long should the company guarantee the batteries (to the nearest month)?

Answer 1

Answer: quickstart batteries will need to be guaranteed for 26 months

Explanation:

the question is incomplete to calculate guarantee period given the maximum refund percentage of 7% we need the mean average life of Quick start batteries and a standard deviation. Let us assume that the mean average life of quickstart batteries is 36 months and standard deviation is 7 months.

P(Z < z*) = 0.07 has a z* = -1.48   [from the Standard Normal table]

Answer = 36 + (-1.48)(7) = 25.64 = 26 months or approximately 35 months