Just question 12 A machine used to fill candy jars dispenses, on the average, mu

Question

Just question 12

A machine used to fill candy jars dispenses, on the average, mu ounces per jar. The manufacturer wants the actual ounces dispensed Y to be within 0.5 ounce of mu at least 75% of the time. What is the largest value of sigma, the standard deviation of Y, that can be tolerated if the manufacturer's objectives are to be met? An insurance company sells an auto insurance policy that covers losses incurred by a policyholder, subject to a deductible of $200. Losses incurred follow an exponential distribution with mean $1000 Compute the expected payment of a policy.

Explanation / Answer

we have P(X ? x) = e^?x/1000, so for x > 200,

P(X ? x|X ? 200) = P(X ? x)/P(X>200)

=>e^-(x-200)/1000

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