Problem 5: You live in a condominium complex that has 12 units. You were just elected to the board of the condominium and the first topic on the agenda for the next board meeting is to contract with a company to plow the condominium parking lot. The lot has 18 parking spots since some units get 1 parking space and some come with 2 parking spaces. The distribution below is the Board's best estimate of the number of snowfalls during the coming winter. a) Find the expected number of snowfalls. Note that you should NOT round this off to an integer. The expected value can be a fractional value. See Chapter 4 of the textbook, section 4.4, page 19. b) The Board is evaluating three different companies with the following cost In other words, if you go with Ohio Plowing and contract for 5 plowings, you will pay them $500 for the contract. Then, as the winter evolves you will need some number of actual plowings. If you only need 3 plowings, you have 2 unused plowings and Ohio Plowing will rebate $50 or 2 times $25 per unused plowing. This will result in a net cost of $500$50=$450. However, if you need 8 plowings, you will have to pay for the 3 beyond the number you contracted for at $125 per extra (or uncontracted) plowing. This will cost you $375 for the three extra plowings for a total cost in that case of $875. Complete the following table: Your colleague on the Board, Jasmine Jones, believes that it is best to contract with a local company and so she is advocating for hiring Michigan Plowing. What is the expected additional cost of using them compared with using the least cost company? Given that she lives next door to you and that you have to live with her for the rest of the year, do you think it is worth it to make a big argument about this? Briefly justify your answer. Problem 5: You live in a condominium complex that has 12 units. You were just elected to the board of the condominium and the first topic on the agenda for the next board meeting is to contract with a company to plow the condominium parking lot. The lot has 18 parking spots since some units get 1 parking space and some come with 2 parking spaces. The distribution below is the Board's best estimate of the number of snowfalls during the coming winter. a) Find the expected number of snowfalls. Note that you should NOT round this off to an integer. The expected value can be a fractional value. See Chapter 4 of the textbook, section 4.4, page 19. b) The Board is evaluating three different companies with the following cost In other words, if you go with Ohio Plowing and contract for 5 plowings, you will pay them $500 for the contract. Then, as the winter evolves you will need some number of actual plowings. If you only need 3 plowings, you have 2 unused plowings and Ohio Plowing will rebate $50 or 2 times $25 per unused plowing. This will result in a net cost of $500$50=$450. However, if you need 8 plowings, you will have to pay for the 3 beyond the number you contracted for at $125 per extra (or uncontracted) plowing. This will cost you $375 for the three extra plowings for a total cost in that case of $875. Complete the following table: Your colleague on the Board, Jasmine Jones, believes that it is best to contract with a local company and so she is advocating for hiring Michigan Plowing. What is the expected additional cost of using them compared with using the least cost company? Given that she lives next door to you and that you have to live with her for the rest of the year, do you think it is worth it to make a big argument about this? Briefly justify your
