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# Statistics - probability - expected value

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A manufacturer of phones realizes a profit of $350 for each telephone sold. However, defective phones can not be sold and cost$700 to produce. Find the expected profit if the probability that a phone is defective is 2.5%

Mar 16, 2019

#1
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$$P[!defective]=1-P[defective]\\ E[profit] = P[!defective]\cdot \350 - P[defective]\cdot \700\\ \text{I leave you to plug and chug}$$

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Mar 16, 2019
#2
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Thank you for the heads up!! I greatly appreciate it!! With your help this is what I come up with...

P(defective) = 1-P(defective)

E(profit) = P(defective) · $350 - P(defective) ·$700

P(defective) = 1 - 0.025 = 0.975

E(profit) = 0.975 · $350 - 0.975 ·$700

$341.25 -$68.25 = $273 E(profit) =$273

Mar 16, 2019
#3
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No.

$350(1-0.025) - 700(0.025) =$341.25 - $17.5 =$323.75

Rom  Mar 17, 2019
#4
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Thank you!! I see where I went wrong but im still honestly confused. I really do appreciate your help!! I will not be taking anymore online math courses after this!! In class Math ONLY for me :)

Could you help me with this please..  Its practicing with binomial distribution

A company has determined that 1% of the parts it makes are defective. If the company packs a shipment of 5 parts to a customer, what is the probability that :

a) none are defective

b) more than 2 are defective

I have been searching for help online and found a similar question where i came up with these answers

P(defective) = 1-0.05

a) = 0.95

2- 0.95

b) = 1.05

I feel like im atleast in the right direction but honestly still dont understand.. :/

Jtbreezii  Mar 18, 2019
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Rom can you please look at this for me?

Jtbreezii, if you want to ask a new question you need to make a new post.

But I am interested in this one.  I think it is confusing too.

A manufacturer of phones realizes a profit of $350 for each telephone sold. However, defective phones can not be sold and cost$700 to produce. Find the expected profit if the probability that a phone is defective is 2.5%

Say the company makes 1000 phones 2.5% of them are faulty

2.5% of 1000=25 phones

So they have really only made 1000-25=975 phones that will be sold

The cost to make them was   700*1000 = $700 000 (even the faulty ones had to be made.) [don't actually need this] The expected profit on a production of 1000 is$350*975 = $341 250 (Remember that only 975 of them are sold.) Expected profit on each phone is$341 250 / 1000 = $341.25 Rom I do not understand why you would take away$17.50 from this  ???????????

Rom's answer is different from mine and I would believe Rom over me.

Mar 18, 2019