What do you expect their average profit to be

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Reference no: EM133399595

Question 1

During the period from 7:00 to 8:00 a.m. the arrivals of cars at a single toll station on the Goose Neck Bridge average 40 cars per hour, according to a Poisson input process. The Toll Station has an exponential service time distribution, with a mean service time rate of 60 cars per hour.

Run a simulation to investigate.
What is a 95% confidence interval for the number of cars getting across the bridge during this one hour period? (Remember CI = Mean ± 2*(std dev)/SQRT(n) )
What is the probability of having two or fewer cars in the queue at the toll station during the hour?

Question 2
The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. Probability distributions for the material cost, the labor cost, and the transportation cost are shown below. They plan to charge a price of $38 for the product.
Run a simulation for 1000 replications calculating the profit per unit.

What do you expect their average profit to be?
What is the probability they will lose money?
What price would you set to ensure they make a profit 90% of the time?

Reference no: EM133399595

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