As the risk manager for the Philadelphia airport you want to collect data on specific airline delays and how it could impact the airports revenue. You start by looking into American Airlines and how many delays they have per day due to repairs. American Airlines has 50 airplanes operating out of Philadelphia airport. Below is the data you have collected.

# of delays per day per plane	probability
0	0.06
1	0.17
2	0.25
3	0.33
4	0.13
5	0.06

a. Calculate the expected frequency of delays per day.

b. Calculated the variance.

Now assume that when delays do occur, they are random and losses due to cost repairs and time delays breakdown as follows 40% of the time they cost $2,500, 45% of the time they cost $3,500 and 15% of the time they cost $9,000

c. Calculate the expected cost per delay?

d. Calculate the expected losses for ALL planes per day.

e. Calculate the expected losses for ALL planes for the whole year.

You then collect data on Jet Blue who operates 30 airplanes out of Philadelphia airport. Below is the data you have collected on delays per plane per day.

# of delays per plane per day	# of planes having these losses
0	6
1	8
2	??
3	7
4	2

f. Calculate the probability distribution for frequency based on the information provided above.

g. Which airline faces the most risk for delays between American Airlines and Jet Blue? Show/explain how you came to this answer.

From past information, you collect the following data related to dollar amount of losses per plane per day when delays to do occur for Jet Blue.

$ amount of losses	probability of dollar loss
1,500	0.20
2,000	0.35
3,000	0.40
5,000	0.05

h. Calculate the expected value of severity for Jet Blue.

i. Calculate the expected loss per plane per day.