In the manufacture of petroleum, the distilling temperature, say ? (degrees centigrade), is crucial in determining the quality of the final product. Suppose that ? isconsidered as a random variable uniformly distributed over (150, 300) with ?(?) = 1 150 . Suppose that it costs ?1 dollars to produce one gallon of petroleum. If the oil distils at a temperature less than 200°C, the product is known as naphtha and sells for ?2dollars per gallon. If it is distilled at a temperature greater than 200°C, it is known as refined oil distillate and sells for ?3 dollars per gallon. Find the expected net profit (per gallon).

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Estimation

A new framework of data analysis where the new statistical methods are used for interpreting the results and analyzing the data is known as estimation in statistics.