Reference no: EM131853759

A manufacturer wants to have an existing column removed from a work area. It will be necessary to remove two existing beams and replace them with a single large beam. The contractor will have to remove the roof adjacent to the two beams in order to take them out of the building and install the new beam. The owner desires that the change be made as soon as possible and that operations in the balance of the building not be influenced by the occurrence of bad weather while the roof is off for the 3 days required to make the necessary changes. In fact, he will pay $2,000 extra to the contractor if the change can be made right away. However, the contractor must pay any cost of damage from bad weather, estimated at $1,000 per day. Records indicate that "bad weather" in this month occurred on 10, 12, 15, and 6 days in the last 4 years. If the occurrence of such events is assumed to be Poisson, should the contractor accept the deal in so wet a month? Base the decision on the data available. Comment on the model chosen. What would the influence of positive correlation among rainy-day occurrences be?