In: Math
Since the time frame is large (95 years) and the probability of occurrence is very low, the type of distribution for the situation should be Poisson distribution. Also, in the give situation
Thus, the situation can be modeled as Poisson distribution.
= annual average of 0.3368 hurricanes per year
Let X be the number of Hurricanes in a year. Then X ~ Poisson( = 0.3368)
Probability of getting hit by zero hurricanes in a year = P(X = 0) = exp(-0.3368) * 0.33680 /0!
= exp(-0.3368) = 0.7140516
Probability of getting hit by at least one hurricanes in a year = P(X 1) = 1 - P(X = 0)
= 1 - exp(-0.3368) = 1 - 0.7140516 = 0.2859484
Probability of getting hit by two or more hurricanes in a year = P(X 2) = 1 - P(X = 0) - P(X = 1)
= 1 - 0.7140516 - exp(-0.3368) * 0.33681 /1!
= 1 - 0.7140516 - 0.2404926
= 0.0454558
Since the Probability of getting hit by two or more hurricanes in a year is less than 0.05, we will plan for only one hurricane for budgeting purposes.