A car repair company (that receives payments on a daily basis) is going to select which car repair offer to accept (A, B, C or D) in order to maximize the company income a) Calculate the expected value (mean) of the different repair offers and indicate which repair offer (A, B. C or D) to accept (i.e. the one with the maximum expected value). b) If the repair is completed in less than or equal to 3 days, the company will receive an extra one time pavment of 1000 TL in all the offers. Considering this new situation, will the repair that offers the maximum income change?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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