Question:

A company makes widgets which it sells in boxes of 20. The probability that any particular widget is defective is 0.05. If a box contains more than 2 defective widgets then the company reimburses the purchaser the full price of the box.

1. What is the probability that a box selected at random will qualify for this compensation scheme (assuming that defective widgets are purely random)?
2. The company also offers a large discount box that contains 500 widgets. For this the purchaser gets reimbursed if the box contains more than 32 defective widgets. Using a suitable approximation calculate the probability that a box qualifies for the reimbursement.

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document