Your firm sells backup generators to hospitals and clinics. The generators are guaranteed to operate


Your strong sells backup generators to hospitals and clinics. The generators are guaranteed to work on insist for two years. Your facts likeness that the generators run an middle of 42 hours per year. Your strong offers an comprehensive certainty that covers the next three years. Your facts likeness that repairs are needed for 2 percent of units during this three-year period. When repairs are needed, the middle require is 4,000. You enjoin 400 for the comprehensive warranty, and encircling 20 percent of your clients buy it.

a. The comprehensive certainty has been a consistent specie loser. Claims middle 1,000 per customer. How could this aspect supervene, given the facts presented short?

b. Would prominence the prize to 1,000 explain this problem?

c. What would you commend that your company do to explain this quantity?