Question

Offered to refund some money if the tire fate to reach 30,000 mies before the tire needs to be replen Speholly, for tres with a time below 30.000 miles, Gear will refund a customer 11 per 100 miles short of 30,000

a. For each tires sold, what is the average cost of promotion (in $) (use at least 1,000 trials. Round answer to two decimal places.)
b. what is the probability that Grear will refund more than $25 for a tire? (use at least 1,000 trials. Round answer to three decimal places.)

Answer 1

Explanation:

The simulation model in excel and calculation of the answers is given below along with formulas:

Formula used for simulation of tire life in Excel range B2:B502 =NORMINV(RAND(),36500,5000)

Note: Once this formula is entered in all the cells in range B2:B502, copy these cells and paste as values, so that Goal seek function can work for part C