Bombardier designs and manufactures trains and planes and relies on large deals from its customers for these

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Bombardier designs and manufactures trains and planes and relies on large deals from its customers for these high-cost products. This series of large contracts makes for a very variable revenue stream compared with the more even income it derives from longterm service contracts. Nina Gupta, an analyst, predicts that Bombardier’s service share will drop to 13% with a standard deviation of 1% next year and that Rolls-Royce’s service share will increase to 54% with a standard deviation of 2%. Assuming you believe Nina’s forecast, what is the probability that

a) Bombardier’s service share will be lower than 14% next year?

b) Rolls-Royce’s service share will be higher than 51% next year?

c) State your assumptions clearly and indicate whether you think the assumptions are true.

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Business Statistics

ISBN: 9780133899122

3rd Canadian Edition

Authors: Norean D. Sharpe, Richard D. De Veaux, Paul F. Velleman, David Wright

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