00:01
We are looking at a normal distribution.
00:02
I'll start by drawing it.
00:05
The total area under this curve is 1 or 100 % and it is symmetric.
00:10
Its mean is 60 months with a standard deviation of 6.
00:15
We want an extended warranty so that a tb has a 95 % chance of being problem -free.
00:23
So imagine if i put this value down here.
00:25
This is the 5th percentile, defined as the value where 5 % is below it and 95 % above it.
00:37
What this means is if i set it here, 5 % of tvs will run into problems before this point and be eligible for the warranty.
00:46
But 95 % of tvs will still be okay.
00:50
They run into problems sometime later, after the warranty has expired.
00:55
So that's where we're going to put the warranty, at the 5th percentile.
00:59
To find this you need something with the normal distribution built into it.
01:03
That could be software like excel or r...