Lesson 8:

The following problem is an example of applying assumed distribution to addressing the prevalent business situation with uncertainty. It is an example of the more general technique of representing uncertainty as a random variable demonstrating that uncertainly doesn't mean you "don't know anything" or decisions are arbitrary or must resort to guessing or intuition. Frequently you will find your guesses or intuition will be far off from what is actually best!

SuperMaxx Realty would like to advise their clients on their expectations on home selling sales for the area they are considering.

1. Discuss on principles the degree it is ok or not ok to assume home sales prices would be Normally distributed. How might we validate this assumption if we were to use this in practice?

Descriptives PRICE Mean 298.25625 Median 293 Mode 276 Minimum 259 Maximum 395 Range 136 Variance 733.1435 Standard Devia 27.0766 Coeff. of Variat 9.08% Skewness 1.1703 Kurtosis 1.9152 Count 96 Standard Error 2.7635