Comments on: OfficeQuip is a small office supply firm that is currently bidding on furniture and office equipment contracts? http://www.proofficesupply.com/blog/officequip-is-a-small-office-supply-firm-that-is-currently-bidding-on-furniture-and-office-equipment-contracts/ Thu, 17 May 2012 23:48:35 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Math Prof http://www.proofficesupply.com/blog/officequip-is-a-small-office-supply-firm-that-is-currently-bidding-on-furniture-and-office-equipment-contracts/comment-page-1/#comment-872 Math Prof Wed, 11 Mar 2009 10:53:59 +0000 http://www.proofficesupply.com/blog/officequip-is-a-small-office-supply-firm-that-is-currently-bidding-on-furniture-and-office-equipment-contracts/#comment-872 This is a binomial probability problem, all the trials are independent, and the success probability for each trial is 0.40. So the failure probability is 0.60. Let X = the number of contracts received P(X = 0) = C(4, 0) * (.40)^0 * (.60)^4 = .1296 P(X = 1) = C(4, 1) * (.40)^1 * (.60)^3 = .3456 P(X = 2) = C(4, 2) * (.40)^2 * (.60)^2 = .3456 P(X = 3) = C(4, 3) * (.40)^3 * (.60)^1 = .1536 P(X = 4) = C(4, 4) * (.40)^4 * (.60)^0 = .0256 Expected profit = $50,000 times the expected number of contracts received = $50,000 * 4 * 0.40 = $80,000 This is a binomial probability problem, all the trials are independent, and the success probability for each trial is 0.40. So the failure probability is 0.60.

Let X = the number of contracts received
P(X = 0) = C(4, 0) * (.40)^0 * (.60)^4 = .1296
P(X = 1) = C(4, 1) * (.40)^1 * (.60)^3 = .3456
P(X = 2) = C(4, 2) * (.40)^2 * (.60)^2 = .3456
P(X = 3) = C(4, 3) * (.40)^3 * (.60)^1 = .1536
P(X = 4) = C(4, 4) * (.40)^4 * (.60)^0 = .0256
Expected profit = $50,000 times the expected number of contracts received = $50,000 * 4 * 0.40 = $80,000

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