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Probability and distribution Problem?

P: 1
I have to formulate this in excel and was wondering if anyone could help me with the formulas.

It has also determined that the number of repair claims filed each week is a random variable
which can take values 1, 2, 4, 5, 6, 7, 8, 9. The probability of having 1 or 9 claims in a week is
equal. The probability that there are 2, 6, 7 or 8 claims in a week is twice the probability of
there being a single claim. The probability that there are 4 claims in a week is twice the
probability that there are 2 claims in a week. The probability that there are 5 claims in a week is
6 times the probability that there is a single claim in a week. The dollar amount per claim fits a
normal distribution with a mean claim amount of $2000 and a standard deviation of $400.

In addition to repair claims, the company also receives claims for cars that have been “totaled”
and cannot be repaired. There is a 20% chance in any week of receiving this type of claim. The
claims for “totaled” cars cost has a uniform distribution, in the range $10000 to $35000. Not all
repair claims are legitimate: 1% of the repair claims filed are rejected. Of the “totaled” claims
filed, 0.5% of them are rejected.

I'm not sure how to make the formulas for paragraph 1. And then I don't know how to incorporate the probability into the random uniform distribution and how to incorporate the reject variable.

Any help would be greatly appreciated.
Jun 21 '14 #1
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1 Reply

Expert Mod 10K+
P: 12,383
The phrase random uniform distribution doesn't make sense. If it's uniform, there's no randomness. If it's random, there's no uniformity.

I don't know what it is you're actually looking to do. A distribution is just a description of the probability of an event. Which you've already done. You will need to be clearer on what your goal is to get more help.

Also, you have no 3 value in your outcomes. Are you saying that 3 never happens?

To figure out the probability of any one number, just let x be the probability of a single occurrence, apply your multipliers, and the sum of all the numbers should equal 1. If you solve for x, that gives you the probability of any one number.
Jun 22 '14 #2

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