Assignment Task
1. A government agency is putting a large project out for low bid. Bids are expected from 10 different contractors and will have a normal distribution with a mean of $3.5 million and a standard deviation of $0.25 million. Devise and implement a sampling experiment for estimating the distribution of the minimum bid and the expected value of the minimum bid.
2. The President’s Inn Guest Database provides a list of customers, rooms they occupied, arrival and departure dates, number of occupants, and daily rate for a small bed-and-breakfast inn during one month. Room rates are the same for one or two guests; however, additional guests must pay an additional $20 per person per day for meals. Guests staying for seven days or more receive a 10% discount. Use the spreadsheet to calculate the number of days that each party stayed at the inn and the total revenue for the length of stay. What is the total revenue for this month?
3. A sample of 33 airline passengers found that the average check-in time is 2.167. Based on long-term data, the population standard deviation is known to be 0.48. Find a 95% confidence interval for the mean check-in time.
4. The Room Inspection report provides data for 100 room inspections at each of 25 hotels in a major chain. Management would like the proportion of nonconforming rooms to be less than 2%. Test an appropriate hypothesis 95% confidence to determine if management can make this claim.
5. Suppose that a car-rental agency offers insurance for a week that costs $75. A minor accident will cost
$2,000, whereas a major accident might cost $16,000 in repairs. Without the insurance, you would be personally liable for any damages.
You researched insurance industry statistics and found out that the probability of a major accident is 0.05% and that the probability of a fender bender is 0.16%. What is the expected value for each decision? What should you do?
