You wish to hire Ricky to manage your new Chicago office. The profits will depend partially on howRicky does his job. If Ricky is lazy, he will surf the internet and game with his friends all day -- heviews this as a$0 opportunity. However, if he works hard, he will view it as having a $12,000personal cost. Assuming the outcomes shown in the probability table below, what percentage ofprofits should you offer Ricky to get his engaged behavior?Lazy / GamingEngaged / Hard WorkerProfit= $100,00020%70%Profit= $20,00080%30%

Given the probability table:Profit = $100,000Profit = $20,000Lazy / Gaming20%80%Engaged / Hard…

Answered: You wish to hire Ricky to manage your…

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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Daily Airlines flies from Amsterdam to London every day. The price of a ticket for this extremely popular flight route is $75. The aircraft has a passenger capacity of 150. The airline management has made it a policy to sell 160 tickets for this flight in order to protect themselves against no-show passengers. Experience has shown that the probability of a passenger being a no-show is equal to 0.1. The booked passengers act independently of each other. Given this overbooking strategy, what is the probability that some passengers will have to be bumped from the flight?
Pretend you and your friend are gunners in a science fiction space game. You and your fellow gunner each have one shot to take out an incoming missile before it hits the ship. Your counter-missile station has a 10% success rate, while the other has a 20% success rate. What is the probability that at least one of you will hit the missile?
An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $40,000. If the economy grows at a moderate pace, the investment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $40,000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from this investment?
Your car is making a funny noise. You believe that the problem is either with the wheel or the axle, and you believe the probability is 0.3 that the wheel needs to be replaced, and 0.7 that the axle needs to be replaced. You need to decide whether to replace the wheel or the axle first. The cost of each alternative is given in the following table (if you decided to replace the wrong part first, you have to replace both of them). The Wheel is broken p = 0.3 The Axle is broken p = 0.7 Replace Wheel First Replace Axle First 600 1500 1500 900 a) Find the EV of each decision alternative. Which part should you replace first? b) What is the EVPI?
You are waiting tables on the side, in order to make rent. You pick up one shift (one day, determined at random) per week. Business is very predictable - on Mondays, 10 tables are occupied with patrons, on Tuesdays, 20 tables, Wednesdays 30 tables, 40 tables on Thursdays and 50 on Fridays. You can assume that you make $10 in tips per table. Your annual rent is $14,400. What is the probability that you are able to make rent from this job, this year? (assuming you work all 52 weeks without a vacation or break)?
In automotive repair, experience has shown that a rough - running engine can be attributed to the bad ignition wires 35% of the time, bad spark plugs 80% of the time, and both problems 20% of the time. Suppose a mechanic begins to diagnose the problem by checking the spark plugs first and find them to be bad. Given this information, what is the probability that the wires are also bad?
It is the beginning of September and you have been offered the following deal to go heli-skiing. If you pick the first week in January and pay for your vacation now, you can get a week of heli-skiing for $2,900. However, if you cannot ski because the helicopters cannot fly due to bad weather, there is no snow, or you get sick, you do not get a refund. There is a 30% probability that you will not be able to ski. If you wait until the last minute and go only if you know that the conditions are perfect and you are well, the vacation will cost you $4,600. You estimate that the pleasure you get from heli-skiing is worth $6,700 per week to you (if you had to pay more than that, you would choose not to go). If your cost of capital is 11% per year, should you book ahead or wait? You should because the NPV of this choice is $ book ahead wait (Round to two decimal places.)
Samatya supermarket is planning to order souvenir cups for the upcoming national feast. The cups cost $5 and sells for $20 each. The managers believe that the demand will be 500 cups with 20% probability, 1000 cups with 50% probability and 1500 cups with 30% probability. They plan to order 600, 1000 or 1300 cups. They have the opportunity to order 200 cups more for with a $15 per cup cost if the demand comes out as 1500 cups. The cups left on hand will be scrapped as there will be no more demand for them. Draw and solve the decision tree for this problem.
Vivian is deciding whether or not to prepare a tender for a job. The cost of producing the tender will be $1600, which will apply even if her company does not win the tender. Vivian has done some quick calculations and currently thinks that there is a 0.57 probability that the cost is $7000, and otherwise the cost is $10400. These costs do not include the cost of producing the tender. She also believes that the probability that the lowest bid submitted by any competing company will be $8800 is 0.35, that the probability that the lowest bid submitted by any competing company will be $16400 is 0.32, and otherwise that the lowest bid submitted by any competing company will be $12400 Vivian is considering whether she should bid $10800, bid $14400, or not bid. You may assume independence between the probabilities that Vivian assigns to her estimated costs of the project and the probabilities of her assumed lowest bids of competing companies. Thus if She submits a price of $14400 then the…
Dystopia county has three bridges. In the next year, the Elder bridge has a 10% chance of collapse, the Younger bridge has a 2% chance of collapse, and the Ancient bridge has a 16% chance of collapse. What is the probability that exactly one of these bridges will collapse in the next year? (Round your final answer to four decimal places. Do not round intermediate calculations.)
Suppose it costs $29 to roll a pair of dice. You get paid 4 dollars times the sum of the numbers that appear on the dice. What is the expected payoff of the game? Is it a fair game? The expected payoff of the game is $? is it a fair game?
An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $40,000. If the economy grows at a moderate pace, the investment will result in a profit of $20,000. However, if the economy goes into recession, the investment will result in a loss of $40,000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from this investment?

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