The owner of Fix-a-dent Auto Repair wants to study the growth of his business using simulation. He is interested in simulating the number of damaged cars and the amount of damage to the cars each month. He currently repairs 100 cars per month and feels this can vary uniformly between a decrease of as much as 3% and an increase of up to 5% (average change of 1%) over the previous months. The dollar value of the damage to the cars is a normally distributed random variable with a mean of $3,000 and a standard deviation of $500. The average repair bill has been increasing steadily over the years and the owner expects the mean repair bill will increase by 1% per month. You have created the following spreadsheet to simulate the problem.

-Using the information in Exhibit 12.1, what Risk Solver Platform (RSP) function should go in cell B9 and copied to B10:B19 to compute the number of cars repaired in the subsequent months?
A)=PsiUniform($B$8*(1+$F$2), $B$8*(1-$H$2))
B)=PsiUniform(B8*(1-$F$2), B8*(1+$H$2))
C)=PsiUniform($C$2*(1-$F$2), $C$2*(1+$H$2))
D)=PsiIntUniform($C$2*(1-$F$2), $C$2*(1+$H$2))

Question

The owner of Fix-a-dent Auto Repair wants to study the growth of his business using simulation. He is interested in simulating the number of damaged cars and the amount of damage to the cars each month. He currently repairs 100 cars per month and feels this can vary uniformly between a decrease of as much as 3% and an increase of up to 5% (average change of 1%) over the previous months. The dollar value of the damage to the cars is a normally distributed random variable with a mean of $3,000 and a standard deviation of $500. The average repair bill has been increasing steadily over the years and the owner expects the mean repair bill will increase by 1% per month. You have created the following spreadsheet to simulate the problem.
  
-Using the information in Exhibit 12.1, what Risk Solver Platform (RSP) function should go in cell B9 and copied to B10:B19 to compute the number of cars repaired in the subsequent months?
A)=PsiUniform($B$8*(1+$F$2), $B$8*(1-$H$2)) 
B)=PsiUniform(B8*(1-$F$2), B8*(1+$H$2)) 
C)=PsiUniform($C$2*(1-$F$2), $C$2*(1+$H$2)) 
D)=PsiIntUniform($C$2*(1-$F$2), $C$2*(1+$H$2))

Quizplus · Accepted Answer

The PsiUniform function generates a uniform distribution, which fits the variability of the number of cars repaired per month as described in the problem. The arguments of the function should be the minimum and maximum values, which can be calculated using the current number of cars repaired (B8) and the variability range given (-3% to 5%). Therefore, option B is the best choice for the function to compute the number of cars repaired in subsequent months.

The Owner of Fix-A-Dent Auto Repair Wants to Study the Growth