Question

Problem 3. A video cassette recorder manufacturer is so certain of its quality control that it is offering a complete replacement warranty if a recorder fails within 2 years. Based upon compiled data, the company has noted that only 3 percent of its recorders fail during the first year, whereas 2 percent of the recorders that survive the first year will fail during the second year. The warranty does not cover replacement recorders (a) Formulate the evolution of the status of a recorder as a Markov chain whose states include two absorption states that involve needing to honor the warranty or having the recorder survive the warranty period. Then construct the (one-step) transition matrix. (b) Find the probability that the manufacturer will have to honor the warranty.

I know the final answer so if your answer does not match will not get thumbs up

Answer 1

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