From a portion of a probability distribution, you read that P(demand = 0) is 0.25, and P(demand = 1) is 0.30. The random number intervals for this distribution beginning with 01 are
A) 01 through 25, and 26 through 30
B) 01 through 25, and 01 through 30
C) 01 through 25, and 26 through 55
D) 00 through 25, and 26 through 55
E) 00 through 25, and 26 through 30

Question

Quizplus · Accepted Answer

The probabilities for demand = 0 and demand = 1 are 0.25 and 0.30, respectively. When converting these probabilities into random number intervals starting with 01, the first interval (for a 0.25 probability) spans from 01 to 25 (25 numbers). The next interval, for a 0.30 probability, follows immediately, spanning from 26 to 55 (30 numbers), making the total count of numbers in both intervals equal to the sum of their probabilities times 100 (since probabilities are expressed as fractions of 1 and the random number intervals are based on a scale of 1 to 100).

From a Portion of a Probability Distribution, You Read That