Exhibit 12.2 The Following Questions Use the Information Below

question 62

Multiple Choice

Exhibit 12.2
The following questions use the information below.
The owner of Fix-a-dent Auto Repair wants to study the growth of his business using simulation. He is interested in simulating the number of damaged cars and the amount of damage to the cars each month. He currently repairs 100 cars per month and feels the change in number of cars can vary uniformly between a decrease of as much as 3% and an increase of up to 5% (average change of 1%) . The dollar value of the damage to the cars is a normally distributed random variable with a mean of $3,000 and a standard deviation of $500. The average repair bill has been increasing steadily over the years and the owner expects the mean repair bill will increase by 1% per month. A spreadsheet model to simulate the problem has been run 300 times. A part of the simulation statistics output from Risk Solver Platform (RSP) and a spreadsheet for computing confidence intervals follows.
-Using the information in Exhibit 12.2, what formula should go in cell B12 of the Confidence Intervals spreadsheet to compute the upper limit on a 95% confidence interval for the population proportion below 90%?

• A) =B10+1.96*B10*(1-B10)/SQRT(B2)
• B) =B10+1.96*SQRT(B10*(1-B10)/B2)
• C) =B10+1.96*SQRT(B10*(1-B10)*B2)
• D) =B10+1.96*B10*(1-B10)/B2

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Definitions:

Eating Habits

The patterns, behaviors, and routines associated with food consumption in an individual or group.

Pantry

A small room or closet where food, dishes, and utensils are kept.

Coffeepot

A container or device for brewing coffee, typically with a spout and handle.

Frame of Reference

A set of criteria or stated values in relation to which measurements or judgments can be made.