1 In performing a symmetric approximation you calculate a me

1) In performing a symmetric approximation, you calculate a mean of the total system cost as $6,500K. The variance is 62500 ($K)2. The POE is $6,350K. What is the probability of overrunning the POE? 0.006% 81.86% 72.57% 50.33%

Solution

P( x > 6350)

using Z standard variable of normal distrbirtuion

P( z > [6350 - 6500] / srqt(62500) ] )

using normal distrbituion Z variable standard for finding the probability

P( z > -0.6) = 1 - 0.2743 = 0.7257 = 72.57%