B16 fx 1 A B C D E F G H | J K 12345 Warranty costs for camera 3 Inputs Parameters of time to failure distribution of any new camera (Gamma) 5 Desired mean 6 Desired stdev 2.5 1 7 Implied alpha 8 Implied beta 9 10 Warranty period 1.5 11 Cost of new camera (to customer) $400 12 Replacement cost (to company) 13 Discount rate $225 8% 14 15 Simulation of new camera and its replacements (if any) 16 Camera 17 Lifetime 18 Time of failure 19 Cost to company 20 Discounted cost 21 22 Failures within warranty 23 NPV of profit from customer 24 25 26 27 28 29 30 31 32 33 34 35 26 1 2 3 4 5