A. .05
B. .10
C. 1.20
D. .96
E. .00
9. Suppose the length of time (in days) between sales for an automobile salesperson is modeled as an exponential distribution with a mean of 2 days. What is the probability the salesperson goes more than 5 days without a sale?
A. .75
B. .92
C. .08
D. .40
E. None of the above.
10. During lunch time, customers arrive at Joe’s Lunch counter according to a Poisson distribution with an average of 2 per 30 second period. What is the probability of having more than two arrivals in a two-minute period?
A. .9863
B. .9970
C. .0027
D .7619
E. None of the above
Use the following to answer questions 11-12
The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and has estimated demand in three categories low, medium and high.
NUMBER
OF
BEAUTICIANS
DEMAND
LOW
MEDIUM
HIGH
One
50
75
100
Two
0
100
100
Three
100
70
300
11. If she uses the optimistic criterion, how many beauticians will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three
12. If she uses the minimax regret criterion, how many beauticians will she decide to hire?
A. one
B. two
C. three
D. either one or two
E. either two or three
Use the following decision tree to respond to the next 5 questions:
13. What is the expected value at node 4?
A. 47.50
B. 43.75
C. 70.00
D. 45.00
E. 71.25
14. What is the expected value of perfect information?
A. 45.00
B. 40.00
C. 10.00
D. 5.00
E. 49.25
15. What is the expected value at node 2?
A. 35.00
B. 7.50
C. 47.50
D. 49.50
E. 55.00
16. What is the best decision strategy for the manager?
A. Do not do the survey, select a large store
B. Do not do the survey, select a Small store
C. Do the survey. If the survey shows low demand then select a small store;
If the survey shows high demand then select a large store.
D. Do the survey. If the survey shows low demand then select a large store;
If the survey shows high demand then select a small store.
E. None of the above is correct
17. What is the expected value of sample information?
A. 45.00
B. 71.25
C. 49.50
D. 1.25
E. 4.50
