A rail operating company incurs extra costs if its long-distance trains are late. Passengers are given a
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Question:
A rail operating company incurs extra costs if its long-distance trains are late.
Passengers are given a voucher to put towards the cost of a future journey if the delay is
between thirty minutes and two hours. If the train is more than two hours late the company refunds the cost of the ticket for every passenger. The cost of issuing vouchers
costs the company 500. The cost of refunding all the fares costs the company 6000.
The probability that a train is between thirty minutes and two hours late is 10% and
the probability a train is more than two hours late is 2%.
What is the expected monetary value of the operating company's extra costs per journey?
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