In: Accounting
Cars arrive at Carla’s Muffler Shop for repair work at an average of 3 per hour, following an exponential distribution. (a) What is the expected time between arrivals? (b) What is the variance of the time between arrivals?
Use Appendix C
Formula sheet
A | B | C | D | E | F | G |
2 | ||||||
3 | Exponential Distribution function is given by following formula: | |||||
4 | ||||||
5 | f(x) = ?e-?x | |||||
6 | ||||||
7 | Where: | |||||
8 | ?: The rate parameter of the distribution, = 1/µ (Mean) | |||||
9 | f(x): Exponential probability density function | |||||
10 | x: Random variable | |||||
11 | ||||||
12 | Mean of exponential function | =1/? | ||||
13 | Variance of exponential function | =1/?2 | ||||
14 | ||||||
15 | Since ? is the rate parameter, car arriving at the rate of 3 per hour is ?. | |||||
16 | ?= | 3 | Per hour | |||
17 | ||||||
18 | a) | |||||
19 | ||||||
20 | Expected time between arrival | =Mean of exponential distribution | ||||
21 | =1/ ? | |||||
22 | =1/D16 | hours | ||||
23 | =D22*60 | min | ||||
24 | ||||||
25 | Hence Expected time between arrival | =D23 | min | |||
26 | ||||||
27 | b) | |||||
28 | ||||||
29 | Variance of exponential function | =1/?2 | ||||
30 | =1/(D16^2) | =1/(D16^2) | ||||
31 | ||||||
32 | Hence Variance of time between arrival is | =D30 | ||||
33 |