The lifetime of a new stereo is estimated to be 12 years, Operation Management

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The lifetime of a new stereo is estimated to be 12 years

The lifetime of a new stereo is estimated to be 12 years with a standard deviation of 2.5 years.

A. What is the probability of the stereo failing after 4 years?

B. If there is a full replacement guarantee of 3.5 years, What is the expected proportion of replacements?

C. If the firm is willing to replace up to 3%, What guarantee period should it specify?

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