Alternative 1 Alternative 2 PW = 0 E(PW), E(PW)2 Present Worth at 12% per Year Relative Frequency
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 that manufactures automobile parts is weighing the possibility of investing in an FMC (Flexible Manufacturing Cell). This is a separate
investment and not a replacement of the existing facility. Management desires a good estimate of the distribution characteristics for the AW. There are three random variables; i.e., they have uncertainties in their values. An economic analyst is hired to estimate the desired parameter, AW. He concludes that the scenario presented to him is suitable for Monte Carlo simulation (method of statistical trials) because there are uncertainties in three variables and the direct analytical approach is virtually impossible. The company has done a preliminary economic study
of the situation and provided the analyst with the following estimates: All the elements subject to variation vary independently. UseMonte Carlo simulation to generate 10 AWoutcomes for the proposed FMC. What is the standard deviation of the outcomes?
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