Decision of Uncertainty

Running head: Decision Uncertainty 1

Decision of Uncertainty

Robert Carpenter

QNT/561

January 7, 2012

Dwayne Jones

Running head: Decision of Uncertainty 2

Introduction

Decision: Extending automobile warranties or not?

There comes a time when one has to make that decision of extending an automobile warranty when it has expired. Because auto warranties provide well needed protection, it does not come cheap be any means. Therefore, the decision to be made is the price of purchasing a warranty over the cost of repairs without a warranty. An extended warranty supplies the ability of possessing coverage for an automobile. It supplies coverage for repairs, parts, rentals, and even labor at a warranty rate rather paying out- of -pocket for every issue.

Research

In order to make the correct decision, I will research information on purchasing extended warranty of a 2005 Chevrolet Silverado. In one year my warranty of my vehicle will expire, and I will have to decide on purchasing an extended warranty to protect my vehicle. After researching the effects of not extending a warranty, the end result can be high auto repair bills. An average cost of an engine repair without protection for an Silverado is $2,000. Therefore, information of whether or not major repairs are needed for this vehicle must be taken into consideration. After gaining information from many auto repair shops about their experience of servicing vehicles, it is wise to acquire extending a warranty. The chances of auto repairs being needed within five years on my vehicle will likely become a factor, therefore gaining information on extending my warranty will help in making the correct decision for my vehicle overall.

Interpretation of Data (using Bayes’ Theorem)

Running head: Decision of Uncertainty 3

To interpret my data, I have decided to utilize Bayes’ Theorem to assist in making the right decision. Bayes’ theorem emulates the process of logical...