10. Pedro Bora suggested establishing the distribution using the relative frequency of various numbers of weekly service calls over the last 4 years. The following tabulation was prepared:

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Questions 10 and 11 are based on the following information.
Bora Maintenance Services has been performing technical maintenance
service on a wide variety of business machines for small businesses in a large
metropolitan area for many years. Bora has been considering a change in its
fee structure. The analysis requires a probability distribution for each week
for the number of anticipated service calls related to each of several different
types of equipment.
Pedro Bora suggested establishing the distribution using the relative
frequency of various numbers of weekly service calls over the last 4
years. The following tabulation was prepared:
10.
Number of Occurrence
4.
Number of Calls
801-850
851-900
10
901-950
80
40
951-1,000
1,001-1,050
1,051-1,100
1,101-1,150
1,151-1,200
1,201-1,250
1,251-1,300
20
12
12
10
8.
4
Based on this probability distribution, the probability of more than 1,150
calls for service during a given week is
0.06.
0.17.
d.
a.
с.
b.
0.89.
0.11.
Bill Bora disagreed with his brother, arguing that the number and size
of the companies with which they held maintenance contracts had
changed recently. He concluded that his past experience was not
relevant, and the firm would be better off recognizing their ignorance of
the future in the rate restructuring. Bill proposed the assumption of
uniform distribution with every possible number of calls from 801 to
1,300 being equally likely. Based on this uniform distribution, the
probability of more than 1,150 calls during a week is
0.40.
11.
a.
c.
0.70.
b.
0.30.
d.
0.20.
Transcribed Image Text:Questions 10 and 11 are based on the following information. Bora Maintenance Services has been performing technical maintenance service on a wide variety of business machines for small businesses in a large metropolitan area for many years. Bora has been considering a change in its fee structure. The analysis requires a probability distribution for each week for the number of anticipated service calls related to each of several different types of equipment. Pedro Bora suggested establishing the distribution using the relative frequency of various numbers of weekly service calls over the last 4 years. The following tabulation was prepared: 10. Number of Occurrence 4. Number of Calls 801-850 851-900 10 901-950 80 40 951-1,000 1,001-1,050 1,051-1,100 1,101-1,150 1,151-1,200 1,201-1,250 1,251-1,300 20 12 12 10 8. 4 Based on this probability distribution, the probability of more than 1,150 calls for service during a given week is 0.06. 0.17. d. a. с. b. 0.89. 0.11. Bill Bora disagreed with his brother, arguing that the number and size of the companies with which they held maintenance contracts had changed recently. He concluded that his past experience was not relevant, and the firm would be better off recognizing their ignorance of the future in the rate restructuring. Bill proposed the assumption of uniform distribution with every possible number of calls from 801 to 1,300 being equally likely. Based on this uniform distribution, the probability of more than 1,150 calls during a week is 0.40. 11. a. c. 0.70. b. 0.30. d. 0.20.
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