Question

Your company offers warranty coverage for MP3 players. The policy provides for the replacement of MP3 players that fail within 3 years of purchase of the MP3 player. The lifetime of a particular model of player is subject to a constant force of mortality, and the expected lifetime is 5 years. On January 1, coverage is purchased for 1000 MP3 players. Calculate the expected number of MP3 players replaced in the first year. (Ans 181.

Answer 1

181 MP3 players

Explanation:

Given data:

Replacement of MP3 that fail within 3 years

expected lifetime of MP3 = 5 years

number of MP3 players purchased = 1000

number of MP3 players replaced in the first year = ?

To determine the number of MP3 replaced in the first year we will employ this formula:

`E(To) = (1)/(u) = e_(x) ^(0) =\int\limits^a_0 {po} \, dt`

a = ∞

since the given problem is an exponential distribution

1/u = 5 hence u = 0.2

next we will determine the number of MP3's to fail in its first year of purchase

qo = failure

po = success

number of purchase = 1000

attached below is the remaining part of the solution