Question: A startup firm has come up with a tiny programmable computer, Gooseberry Alpha, that sells for just $1. The firm estimates that the programmable computers

A startup firm has come up with a tiny programmable computer, Gooseberry Alpha, that sells for just $1. The firm estimates that the programmable computers have an expected life of thirty months (the product life being described by an exponential distribution). The firm wants to determine a free service period for this product.

a) The firm is planning to offer service contracts for the expected life of the programmable computers, i.e. for 30 months; the firm would like to know what percentage of the programmable computers sold would be expected to fail during the service period?

b) The firm also wants to determine what service period would result in a failure rate of approximately ten percent.

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