The passenger car tires manufactured by Greatyear Co. last on average 66,000 mil

Question

The passenger car tires manufactured by Greatyear Co.  last on average 66,000 miles ( = 66,000).  Ten percent (10%) of tires last more than 72,000 miles.  Greatyear is considering a guarantee that will provide a discount on replacement tires if the original tires do not reach the guaranteed mileage.  What should the guaranteed mileage be if Greatyear wants no more than (at most) 5 percent of the tires be eligible for the discount guarantee? 58313 57461 56356 55270 The passenger car tires manufactured by Greatyear Co.  last on average 66,000 miles ( = 66,000).  Ten percent (10%) of tires last more than 72,000 miles.  Greatyear is considering a guarantee that will provide a discount on replacement tires if the original tires do not reach the guaranteed mileage.  What should the guaranteed mileage be if Greatyear wants no more than (at most) 5 percent of the tires be eligible for the discount guarantee? 58313 57461 56356 55270

Explanation / Answer

Here assumption is made that the data is normally distributed

mean = 66000
For 10%, z-value = 1.28
sigma = (72000 - 66000)/1.28
sigma = 4687.5

for 5%, z-value = 1.65
x = 66000 - 1.65*4687.5
x = 58265.625

Hence option A is correct

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