A manufacturer of programmable calculators is attempting to determine a reasonable free-service
period for a model it will introduce shortly. The manager of product testing has indicated that the
calculators have an expected life of 30 months. Assume product life can be described by an exponential distribution.
a. If service contracts are offered for the expected life of the calculator, what percentage of those
sold would be expected to fail during the service period?
b. What service period would result in a failure rate of approximately 10 percent?
