1the operations manager for a local bus company wants to


1)The operations manager for a local bus company wants to decide whether he should purchase a new small, medium, or large bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows :

Bus

Demand

Small

50

60

70

Medium

40

80

90

Large

20

50

120

The manager believes the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively. What is the expected annual profit for the bus that he will decide to purchase?

A

$61,000

B

$72,000

C

$15,000

D

$69,000

E

$87,000

2)The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. Skull's president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows:


Annual Operating Costs

Location

Fixed Costs

Variable Costs

Alpha Ave

$5,000

$200/person

Beta Blvd.

$8,000

$150/person

If it is estimated that thirty persons will be living in this new chapter house, which location should the Skulls select?

A

Alpha Ave

B

reject both Alpha Ave. nor Beta Blvd.

C

either Alpha Ave. or Beta Blvd.

D

Beta Blvd.

E

become a virtual organization

3)The expected (mean) life of a particular type of light bulb is 1,000 hours with a standard deviation of 50 hours. The life of this bulb is normally distributed. What is the probability that a randomly selected bulb would last longer than 1150 hours?

A

0.5013

B

0.4987

C

0.0013

D

0.9987

4)Abel Alonzo, Director of Human Resources, is exploring employee absenteeism at Batesville Bottling during the last operating year. A sample of six personnel records produced the following data: 0, 2, 4, 7, 2, 9. The standard deviation of the number absences per employee is _________________.

A

3.41

B

9.67

C

11.6

D

3.11

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Econometrics: 1the operations manager for a local bus company wants to
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