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A company operates a solar installation in the desert in Western Australia. It is reviewing its...

A company operates a solar installation in the desert in Western Australia. It is reviewing its operating practices with a view to making them more efficient. The solar installation generates electric power from sunlight and incurs operating costs for cleaning the solar modules (sometimes called solar panels) and replacing solar modules that have failed.

a) The annual revenue from the electric power is variable due to variable cloudiness and solar module failure and has a mean of $2.78m and a standard deviation of $0.32m. The annual operating costs have a mean of $0.51m and a standard deviation of $0.12m. Expected revenue varies systematically from one month to another, being higher in the summer when there is more sunshine. Monthly operating costs follow the same probability model regardless of the month (same mean and standard deviation apply to all months). Calculate, if possible, the mean and standard deviation of (i) monthly operating costs (ii) monthly profits. If a calculation is not possible, give the reason.

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milcah answered 4 months ago
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