The company wishes to budget enough for each group that

Reference no: EM13471438

For budgeting purposes, each manager in a company must estimate their group's monthly expenses. Manager 1 estimates that her monthly expenses are uniformly distributed between $15,000 and $45,000. Manager 2 estimates that his monthly expenses are normally distributed with mean $21,000 and standard deviation $3,000. Manager 3 estimates that her monthly expenses follow a discrete distribution with p($15, 000) = 0.2, p($20, 000) = 0.4, p($25, 000) = 0.3, and p($30, 000) = 0.1.

a) For each of the three managers, compute the mean and standard deviation of their group's monthly expenses.

b) For each of the three managers, estimate the probabilities that their group's monthly expenses are: i) between $17,000 and $24,000, ii) higher than $22,000, iii) below $18,000, and iv) exactly $25,000.

c) The company wants to budget enough for each group that the probability of expenses being over budget is at most 15%. How much should the company budget for each manager?

d) The company wants to budget enough for each group that the probability of expenses being over budget is at most 0.5%. How much should the company budget for each manager?

Reference no: EM13471438

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