A large industrial firm purchases several new word processors at the end of each year, the exact number depending on the frequency of repairs in the previous year. Suppose that the number of word processors, X, purchased each year has the following probability distribution: x 0 1 2 3 f(x) 1/10 3/10 2/5 1/5 If the cost of the desired model is $1200 per unit and at the end of the year a refund of 50X 2 dollars will be issued, how much can this firm expect to spend on new word processors during this year?
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!
A large industrial firm purchases several new word processors at the end of each year, the exact number depending on the frequency of repairs in the previous year. Suppose that the number of word processors, X, purchased each year has the following probability distribution:
|
x |
0 |
1 |
2 |
3 |
|
f(x) |
1/10 |
3/10 |
2/5 |
1/5 |
If the cost of the desired model is $1200 per unit and at the end of the year a refund of 50X 2 dollars will be issued, how much can this firm expect to spend on new word processors during this year?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
