Newton’s, a tire manufacturer, wanted to set a mileage guarantee on its - 6505

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Newton’s, a tire manufacturer, wanted to set a mileage guarantee on its new Road Warrior 60 tire. A sample test of 500 tires revealed that the tire’s mileage is normally distributed with a mean of 50,000 miles and a standard deviation of 1,750 miles. The warranty on the tires is presently set at 47,500 miles. The z-test statistic result was 1.43. The manufacturer wanted to determine if the tires were exceeding the guarantee. At the .05 significant level, it was concluded that the tires are exceeding the manufacturer’s guarantee.

A.   This was the correct decision.

B.   A decision cannot be made.

C.   The decision needs to be delay until more data is collected.

D.   The evidence does not support this decision.

Solution Description

Newton’s, a tire manufacturer, wanted to set a mileage guarantee on its new Road Warrior 60 tire. A sample test of 500 tires revealed that the tire’s mileage is normally distributed with a