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Probability
bability of winning each project. ependent. Profit Project A $75,000 Proiect R $120.000 с

bability of winning each project. ependent. Profit Project A $75,000 Proiect R $120.000 с

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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3. A construction company submits bids for two projects. Listed in Table 1 are the profit and probability of winning each project. Assume that the outcomes of the two bids are independent. Profit $75,000 Project A Project B $120,000 Chance of Winning Bid 0.50 0.65 Table 1: Projects, Bids, and Profits (a) List the possible outcomes (win/not win) for the two projects and find their probabilities. (b) Let X denote the company's total profit out of the two contracts. Determine the probability distribution of X. (c) If it costs the company $2000 for preparatory surveys and paperwork for the two bids, what is the expected net profit?
Transcribed Image Text:3. A construction company submits bids for two projects. Listed in Table 1 are the profit and probability of winning each project. Assume that the outcomes of the two bids are independent. Profit $75,000 Project A Project B $120,000 Chance of Winning Bid 0.50 0.65 Table 1: Projects, Bids, and Profits (a) List the possible outcomes (win/not win) for the two projects and find their probabilities. (b) Let X denote the company's total profit out of the two contracts. Determine the probability distribution of X. (c) If it costs the company $2000 for preparatory surveys and paperwork for the two bids, what is the expected net profit?
Expert Solution
Introduction

Probability is nothing but the likelihood of occurrence of an event.

There are some basic rules of probability that we should know to solve above problem 

  •  The range of possible probabilities is lies between 0≤P(A)≤1
  • The sum of all possible probabilities is always 1
  • For any event A,  P(A) = 1 - P(Ac)
  • If event A and B are independent then P(A and B) = P(A)*P(B).

 

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