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In: Statistics and Probability

Gadgets&Co sells refrigerators. Any refrigerator that malfunctions within 3 years of purchase is replaced with a...

Gadgets&Co sells refrigerators. Any refrigerator that malfunctions within 3 years
of purchase is replaced with a new one for free. Of all refrigerators, 3% fail during
their first year of operation; 5% of the one-year-old refrigerators fail within their
second year of operation, and 7% of the two-year-old refrigerators fail within their
3
rd year of operation.
a) Estimate analytically the fraction of all refrigerators that will have to be
replaced under the 3-year warranty scheme.
b) Construct and execute a simulation model (with 120 pseudo-realities) to
estimate the fraction of all refrigerators that will have to be replaced under
the 3-year warranty scheme. Explain and motivate your approach.

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orchestra answered 1 year ago
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