Expected to change as the arrival rate

Assignment Help Basic Statistics

Reference no: EM13823725

1. Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%. What is the expected value decision? Would you choose this? Why or why not? What would be some alternate ways to evaluate risk?

2. Suppose that the service rate to a waiting line system is 10 customers per hour (exponentially distributed). Analyze how the average waiting time is expected to change as the arrival rate varies from two to ten customers per hour (exponentially distributed).

Reference no: EM13823725

Questions Cloud

An incident command system : For the last question set up and diagram an Incident Command System for the following scenario. Define all the roles and responsibilities for each function area that would be included in this scenario. SCENARIO: At 10:05a.m. today, a hurricane/earthq..

Power dissipated by the circuit : Power dissipated by the circuit

What are the main changes taking place in organizational : (a) How could information systems be used to achieve greater customer intimacy in an auto manufacturer and distributor?(b) What are the main changes taking place in organizational use of information systems. Which of these do you think is having the ..

Importance of the hawkins-simon conditions : Discuss the importance of the Hawkins-Simon conditions in input-output analysis - what values of x will be the function be discontinuous?

Expected to change as the arrival rate : Suppose that the service rate to a waiting line system is 10 customers per hour (exponentially distributed). Analyze how the average waiting time is expected to change as the arrival rate varies from two to ten customers per hour (exponentially d..

Explain difference between community and traditional policy : Provide your own definition of community-policing and explain the difference between community policing and traditional policing.

The angular momentum of the rod : the angular momentum of the rod

Decisions made by the board from presidential term to term : The National Labor Relations Board consists of five members, who serve staggered terms and who are appointed by the president of the United States. How do you think the president's political outlook plays into who is appointed to sit on the board? Ho..

The formulation of a strategy or the implementation : Which is more important: the formulation of a strategy or the implementation of a strategy? What are the challenges associated with your choice? Support your primary response with at least one scholarly source. Provide in-text citations and complete..

User Account

All Pages