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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
avatar+5662 
+2

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

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 Mar 16, 2019
 #2
avatar+43 
+1

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
avatar+5662 
+2

No.

 

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

Rom  Mar 17, 2019
 #4
avatar+43 
0

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
 #5
avatar+102792 
+1

Rom can you please look at this for me?   laugh

 

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.    sad

 Mar 18, 2019

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