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Mathematics, 26.06.2020 15:01 Arneis

A fast food restaurant just leased a new freezer and food fryer for three years. The service contract for the freezer offers unlimited repairs for a fee of $125 a year plus a $35 service charge for each repair needed. The restaurant's research indicates that during a given year 80% of these freezers need no repairs, 11% needed to be serviced once, 5% twice, 4% three times, and none required more than three repairs. A. Find the expected number of repairs this kind of freezer is expected to need each year. Show your work B. Find the standard deviation of the number of repairs each year. C. What are the mean and standard deviation of the restaurant annual expense for the service contract? D. How many times should the restaurant expect to have to get this freezer repaired over the three year term of the lease? E. What is the standard deviation of the number of repairs that may be required during the three year term of the lease? On what assumption does your calculation rest?Do you think this assumption is reasonable? F. The yearly service contract for the food fryer estimates a mean annual cost of $140 with a standard deviation of $40.What is the expected value and standard deviation of the total cost for the service contracts for the freezer and the food fryer? G. Which service contract should the restaurant expect to cost more each year? How much more? With what standard deviation?

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