A mid-sized food distributor has between $1 million and $1.2 million in revenue per week over the past several years. Suppose the probability of making more than $1.2 million a week is .05:

Question

a) What is the probability of selecting ten weeks and finding that none of those weeks had revenues over $1.2 million?

b) What is the probability of selecting 5 random weeks and finding that exactly one of those weeks revealed a revenue of more than $1.2 million?

c) What is the probability of selecting 10 weeks at random and exactly two weeks had revenues below $1.2 million?

d) What is the probability of selecting 5 random weeks and all had revenues above $1.2 million?

Answer 1

So the key to answering this question is that we want to know rather it makes more than 1.2 million dollars or not. So we have two possibilities, and we are given the probability of making more than 1.2 million dollars in a week, which is .05. So the best way to model this probability is to assume that the random variable, which are the weeks in which we make more than 1.2 million dollars, follows Binomial distribution (n,p). Once we have that set, we can answer our question! I hope this helps.