Question

According to the Air Transport Association of America, the average operating cost of an MD-80 jet airliner is $2,087 per hour. Suppose the operating costs of an MD-80 jet airliner are normally distributed with a standard deviation of $162 per hour.

(Round the value of z to 2 decimal places. Round your answers to 2 decimal places.)

(a) At what operating cost would only 23% of the operating costs be less? $enter the dollar amount at which only 23% of the operating costs would be less (b) At what operating cost would 65% of the operating costs be more? $enter the dollar amount at which 65% of the operating costs would be more (c) What operating cost would be more than 85% of operating costs? $enter the dollar amount that would be more than 85% of operating costs

Answer 1

Solution:

We are given:

(a) At what operating cost would only 23% of the operating costs be less?

Answer: We have to first find the z-value corresponding to area 0.23. Using the standard normal table, we have:

Now using the z-score formula, we have:

Therefore, $1967.12 at which only 23% of the operating costs would be less

(b) At what operating cost would 65% of the operating costs be more?

Answer: We have to first find the z-value corresponding to area 1-0.65=0.35. Using the standard normal table, we have:

Now using the z-score formula, we have:

Therefore, $2023.82 at which 65% of the operating costs would be more

(c) What operating cost would be more than 85% of operating costs?

Answer: We have to first find the z-value corresponding to area 0.85. Using the standard normal table, we have:

Now using the z-score formula, we have:

Therefore, $2255.48 that would be more than 85% of operating costs