Problem
Edward Owen is responsible for the maintenance, rental, and day-to-day operation of several large apartment complexes on the upper east side of New York City. Owen is especially concerned about the cost projections for replacing air conditioner (A/C) compressors. He would like to simulate the number of A/C failures each month. Using data from similar apartment buildings he manages in a New York City suburb, Clark establishes the probability of failures during a month as follows:
Number of A/C Failures Probability
0 0.10
1 0.17
2 0.21
3 0.28
4 0.16
5 0.07
6 0.01
• Simulate Owen's monthly A/C failures for a period of three years. Compute the average number of failures per month.
• Explain any difference between the simulated average failures and the expected value of failures computed by using the probability distribution.