Question

The manager of a publishing company plans to give a $21,000 bonus to the top 13 percent, $10,000 to the next 32 percent, and $6,000 to the next 11 percent of sales representatives. If the publishing company has a total of 220 sales representatives, what is the expected bonus that the company will pay?

expected bonus: ?

Answer 1

Solution:

Given: The manager of a publishing company plans to give

a $21,000 bonus to the top 13 percent,

$10,000 to the next 32 percent, and

$6,000 to the next 11 percent of sales representatives.

N = Total sales representatives = 220

We have to find  the expected bonus that the company will pay.

First find expected value of bonus.

x: Bonus	P(x)	x*P(x)
$ 21,000.00	0.13	$ 2,730.00
$ 10,000.00	0.32	$ 3,200.00
$   6,000.00	0.11	$      660.00
$                -	0.44	$               -

Since company have N = Total sales representatives = 220

Thus

The expected bonus that the company will pay = 220 * E(X)

The expected bonus that the company will pay = 220 * $6590

The expected bonus that the company will pay =  $14,49,800