Chapter 7

In establishing warranties on HDTV sets, the manufacturer wants to set the limits so that few will need repair at manufacturer expense. On the other hand, the warranty period must be long enough to make the purchase attractive to the buyer. For a new HDTV the mean number of months until repairs are needed is 36.84 with a standard deviation of 3.34 months. Where should the warranty limits be set so that only 10 percent of the HDTVs need repairs at the manufacturer's expense?

DeKorte Tele-Marketing, Inc., is considering purchasing a machine that randomly selects and automatically dials telephone numbers. DeKorte Tele- Marketing makes most of its calls during the evening, so calls to business phones are wasted. The manufacturer of the machine claims that their programming reduces the calling to business phones to 15 percent of all calls. To test this claim the Director of Purchasing at DeKorte programmed the machine to select a sample of 150 phone numbers. What is the likelihood that more than 30 of the phone numbers selected are those of businesses, assuming the manufacturer's claim is correct?