You hire a contractor to perform four different jobs. The amount the contractor will charge you for
Question:
You hire a contractor to perform four different jobs. The amount the contractor will charge you for job 1 is normally distributed with mean $5,000 and standard deviation $900. The amounts the contractor will charge you for the other jobs are also normally distributed with the following parameters. Job 2: mean $8,000, standard deviation $1,300; Job 3: mean $3,000, standard deviation $500; Job 4: mean $6,000, standard deviation $1,100. As an incentive, you tell the contractor you'll pay him a bonus of $500 if the total cost of all jobs is less than $19,000, or a bonus of $250 if the total cost of all jobs is between $19,000 and $21,000. There won't be any bonus if the total cost of all jobs is greater than $21,000. After running a simulation with at least 1,000 replications, what is the most realistic conclusion about the bonus?
O a. The probability that the bonus is exactly $250 is around 0.24.
O b. The probability that there is no bonus is around 0.57.
O c. The probability that the bonus is exactly $500 is around 0.21.
O d. The probability that the bonus is at least $250 is around 0.47.
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe