The manager of a construction job needs to figure prices carefully before submitting a bid. He also needs to account for uncertainty (variability) in the amounts of products he might need. To oversimplify the real situation, suppose that a project manager treats the amount of sand, in yards, needed for a construction project as a random variable Y1, which is
If Y1 and Y2 are independent, how much should the manager bid to ensure that the true costs will exceed the amount bid with a probability of only .01? Is the independence assumption reasonable here?
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Mathematical Statistics with Applications
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