Question: In establishing warranties on HDTV sets the manufactures wants the set the limits so that few will need repair at manufactures expense. On the other hand the warranty period must be long enough to make purchase attractive to the buyer. For a new HDTV the mean number of months until repairs are needed is 36.84 with standard deviation of 3.34 months.

a. Where should the warranty limits be set so that only 10% of the HDTV’s needs repairs at the manufacturers expense.