A company is considering two insurance plans with the following types of coverage and premiums: Plan A Plan B Fire/Theft $21000 $32000 Liability $152000 $142000 Monthly Premium $80 $62 Premiums are sold in units. For example, one can buy one unit of plan A insurance for $80.00 per month and receive $21,000.00 in Theft/Fire insurance. Two units of plan A insurance cost $160.00 per month and give $42,000.00 in Theft/Fire insurance. The company wants at least $594,000.00 in coverage for Theft/Fire insurance and $3,224,000.00 in coverage for liability insurance. How many units of each plan should be purchased to meet the needs of the company while minimizing cost? What are the costs and unit amounts of the most expensive plan and the median priced plan?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
A company is considering two insurance plans with the following types of coverage and premiums:
| Plan A | Plan B | |
| Fire/Theft | $21000 | $32000 |
| Liability | $152000 | $142000 |
| Monthly Premium | $80 | $62 |
Premiums are sold in units. For example, one can buy one unit of plan A insurance for $80.00 per month and receive $21,000.00 in Theft/Fire insurance. Two units of plan A insurance cost $160.00 per month and give $42,000.00 in Theft/Fire insurance. The company wants at least $594,000.00 in coverage for Theft/Fire insurance and $3,224,000.00 in coverage for liability insurance.
How many units of each plan should be purchased to meet the needs of the company while minimizing cost? What are the costs and unit amounts of the most expensive plan and the median priced plan?
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