A factory owner in Kampala, Uganda knows that each mistake on a particular machine costs 200,000 Ugandan Schillings (UGX). The probability of no mistakes on a particular day is 0.40 and 2 mistakes occur 10% of the time, 3 mistakes happen on only 1 in 20 occasions. The rest of the time there is 1 mistake. What is the expected cost of mistakes each day?
A) UGX 160,000
B) UGX 180,000
C) UGX 200,000
D) UGX 220,000

Question

Quizplus · Accepted Answer

Expected cost = (0.40 x 0) + (0.40 x 200,000) + (0.10 x 600,000) + (0.05 x 900,000) = UGX 160,000

A Factory Owner in Kampala, Uganda Knows That Each Mistake