The Boffo Product Company sells a waffle iron on which they have done product testing. They have determined that the amount of time the product will last can be described by a normal distribution. In particular, the average waffle iron lasts for 12 years and one standard deviation is 8 months. How long should they warranty the product for if they want no more than 6.7% of the waffle irons to fail within that time?
Suppose they warranty the waffle iron for the amount of time found in the previous question and suppose that it costs them $13 to make each waffle iron. How much should they charge to make an average profit of $5 per waffle iron? Assume they refund the full price for each failed waffle iron.