What Type of Probability Distribution Will Most Likely Be Used

question 137

Multiple Choice

What type of probability distribution will most likely be used to analyze warranty repair needs on new cars in the following problem?
The service manager for a new automobile dealership reviewed dealership records of the past
20 sales of new cars to determine the number of warranty repairs he will be called on to
Perform in the next 90 days. Corporate reports indicate that the probability any one of their
New cars needs a warranty repair in the first 90 days is 0.05. The manager assumes that calls
For warranty repair are independent of one another and is interested in predicting the number
Of warranty repairs he will be called on to perform in the next 90 days for this batch of 20
New cars sold.

• A) binomial distribution.
• B) Poisson distribution.
• C) hypergeometric distribution.
• D) none of the above.

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Definitions:

Estimated Useful Life

The expected timeframe during which an asset is likely to be functional and useful for its intended purpose before it becomes obsolete.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear, or obsolescence.

Depreciable Cost

The cost of a plant asset less its salvage value.

Remaining Useful Life

The expected period that an asset is anticipated to be functional and economically viable for use in operations.