A manufacturer of a certain product can expect that between 0.4 percent and 0.5 percent of the units...
A manufacturer of a certain product can expect that between 0.4 percent and 0.5 percent of the units manufactured will be defective. If the retail price is $2,500 per unit and the manufacturer offers a full refund for defective units, how much money can the manufacturer expect to need to cover the refunds on 20,000 units?
Answer/Solution
Between $200,000 and $250,000
Steps/Work
Number of defective units is between = .4 % of 20000 and .5% of 20000
= 80 and 100
Retail Price per unit = 2500 $
Expected price of refund is between = 2500 x 80 and 2500 x 100
=2,00,000 and 2,50,000 dollars
Answer C
= 80 and 100
Retail Price per unit = 2500 $
Expected price of refund is between = 2500 x 80 and 2500 x 100
=2,00,000 and 2,50,000 dollars
Answer C