Question

you buy a coffee maker at Best Buy. At the counter, you are offered a warranty for 1 year that cost $15. if the coffee maker stops working within the waranty period, best buy will replace it. the cost of replacing the coffee maker is $80. the probability of the product failure during the waranty period is 10% write the probability distribution table from the perspective of Best Buy

Answer 1

Best Buy's probability distribution table includes the probability of the coffee maker failing, the probability of it not failing, and the cost of replacement for each possible outcome.

Step-by-step explanation:

In this scenario, Best Buy is offering a warranty for $15 that covers the cost of replacing a coffee maker if it stops working within 1 year. The cost of replacing the coffee maker is $80, and the probability of it failing within the warranty period is 10%.

To create a probability distribution table, we need to calculate the probability of the coffee maker failing and the cost of replacement for each possible outcome.

The probability of the coffee maker failing is 10% or 0.10. The probability of it not failing is 1 - 0.10 = 0.90.

Considering the possible outcomes:

• If the coffee maker fails, the cost of replacement for Best Buy is $80.
• If the coffee maker does not fail, Best Buy doesn't have any additional cost.

The probability distribution table from Best Buy's perspective is:

Outcome Probability Replacement Cost Failure 0.10 $80 No Failure 0.90 $0