29. Six months before its annual convention, the American Medical Association must determine how manyrooms to reserve. At this time, the AMA can reserverooms at a cost of $150 per room. The AMA believesthe number of doctors attending the convention willbe normally distributed with a mean of 5000 and astandard deviation of 1000. If the number of peopleattending the convention exceeds the number of roomsreserved, extra rooms must be reserved at a cost of$250 per room.a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimizethe expected cost to the AMA. Try possible valuesfrom 4100 to 4900 in increments of 100.b. Redo part a for the case where the number attending has a triangular distribution with minimumvalue 2000, maximum value 7000, and most likelyvalue 5000. Does this change the substantiveresults from part a?
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
29. Six months before its annual convention, the American Medical Association must determine how many
rooms to reserve. At this time, the AMA can reserve
rooms at a cost of $150 per room. The AMA believes
the number of doctors attending the convention will
be
standard deviation of 1000. If the number of people
attending the convention exceeds the number of rooms
reserved, extra rooms must be reserved at a cost of
$250 per room.
a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize
the expected cost to the AMA. Try possible values
from 4100 to 4900 in increments of 100.
b. Redo part a for the case where the number attending has a triangular distribution with minimum
value 2000, maximum value 7000, and most likely
value 5000. Does this change the substantive
results from part a?
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