Question: Straightshot Tennis Racket Company guarantees their rackets for 9 years. On each racket they sell, they make a profit of $13. However, they must pay $42 for any replacement under the guarantee. (If the replacement also breaks within 8 years they are not committed to a second replacement). The racket life is approximately normally distributed around a mean of 12.4 years and a standard deviation of 4 years.

1. Assume that 100 rackets are sold per year. What is the average profit per sale (net, after paying for possible replacement under the warranty?)
2. If they want this average profit per sale to be $50, by how much should they reduce the time period of the warranty?

Price: $2.99

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