Use the information in OGSIM-A.xls to simulate losses for Ontario Gateway using Radiant's new simulation tool (Decide > Simulate). To simulate the number of planes that will crash in a year define a Binomial variable for each of the three types of planes in the Simulate tab. Select the appropriate values for n and p for each plane type. To simulate the cost of incidental damages create Uniform variable with $1M as the minimum value and $5M as the maximum value. Next, specify a Simulation formula to determine the dollar value of the total simulated losses (i.e., simulated loses for each plane type plus the incidental costs). Use total as the variable name. Also create formula to determine the probability that costs will exceed $37M. Use bankrupt as the variable name. Press the Simulate button at intermediate steps to check you haven't entered invalid inputs. When you are done with the inputs make sure to Set random seed to 1234 and # sims to 5000 for the simulation.

Based on the simulation results, what is the expected total of incidental and loss costs?

What is the probability that this total costs will exceed $37M?

flight days/year 342

p (crash) per flight 0.0000002

aircraft flights per day flights per year (n)

B757-200 6.00 96444

A340-200 2.25 11542.5

A340-300 2.00 16416

aircraft insured value per aircraft number of aircraft insured value of fleet

B757-200 56 400 000$ 47 2 650 800 000$

A340-200 78 900 000$ 15 1 183 500 000$

A340-300 88 500 000$ 24 2 124 000 000$