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Unformatted text preview: Review I ISE 3424 Discrete-Event Simulation Pasupathy, Spring 2010 1. An insurance company writes a policy to the effect that m dollars must be paid if a hurricane of category 5 occurs in a region of interest within a year. Suppose the company estimates that the hurricane will occur within a year with probability p . What should it charge for the policy, if the expected profit is to be 10 percent of m ? 2. Let X be a random variable having expected value and variance 2 . Find the expected value and variance of Z = X . 3. A bin of 5 electrical components is known to contain 2 that are defective. If the components are to be tested one at a time, in random order, until the defectives are discovered, find the expected number of tests that are made. 4. Each night different meteorologists give us the probability that it will rain the next day. To judge how well these predict, we will score each of them as follows: if a meteorologist says that it will rain with probability...
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- Spring '10