A Fast Food Restaurant Just Leased a New Freezer and Food

question 24

Essay

A fast food restaurant just leased a new freezer and food fryer for three years. The
service contract for the freezer offers unlimited repairs for a fee of $125 a year plus a $35
service charge for each repair needed. The restaurant's research indicates that during a
given year 80% of these freezers need no repairs, 11% needed to be serviced once, 5%
twice, 4% three times, and none required more than three repairs.
A. Find the expected number of repairs for this freezer per year.
b. Find the standard deviation of the number of repairs per year.
c. What are the mean and standard deviation of the restaurant's annual expense with the
service contract for the freezer?

---

Definitions:

Off-price Retailers

Retail stores that sell branded goods at lower prices than mainstream retail stores, often through the sale of surplus stock or from past seasons.

Convenience Stores

Retail outlets that offer a limited range of food and household products, intended for quick and convenient purchasing.

Mom-and-Pop

Small, often family-owned, businesses that operate in a local community or neighborhood, distinct from larger chains or corporations.

Manufacturers

Entities or individuals involved in the production of goods using labor, machinery, tools, and chemical or biological processing or formulation.