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A Company Has Produced a New Battery with an Estimated

question 57

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A company has produced a new battery with an estimated mean lifetime of 60 hours. Management also believes that the standard deviation is 4.5 hours and that battery hours are normally distributed. To promote the new battery, management has offered to refund some money if the battery fails to reach 50 hours before the battery needs to be recharged. Specifically, for batteries with a lifetime below 50 hours, the management will refund a customer $50 per hour short of 50 hours.
a. For each battery sold, what is the expected cost of the promotion?
b. What hours should the company set the promotion claim if it wants the expected cost to be $0.50?


Definitions:

LLC Contracts

Legal agreements that are specifically related to or entered into by a Limited Liability Company (LLC).

ULPA

An acronym for "Uniform Limited Partnership Act," which is a statute that sets forth the legal rules and regulations governing limited partnerships in various jurisdictions.

Expel

Expelling refers to the action of forcing someone or something out of a place or situation.

Limited Partnership

A business structure where some partners have limited liability and limited involvement in the management of the company.

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