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Anvisha [2.4K]
3 years ago
5

A package delivery company experiences high variability in daily customer demand, which in turn results in high variability in t

he daily workload at the central sorting facility. The company relies on its sorting facility employees working overtime to provide on-time delivery when the workload demand is very high. A sorting facility employee receives a salary of $12/hour for a 40 hour week, and the employee receives $18/hour for every hour worked overtime, that is, for every hour worked over 40 hours in a given week. The number of overtime hours that an employee works in any given week is a random variable, with a mean of 15 hours and a standard deviation of 4 hours.
Required:
What are the mean, the standard deviation, and the variance of an employee's total weekly salary?
Mathematics
1 answer:
Ilya [14]3 years ago
4 0

Solution :

Let :

X = number of overtime hours

S = total weekly salary

S = $12 \times 40 + 18 \times X$

S = 480 + 18X

E(S) = $480 + 18 \times E(X)$

$E(S) = 480 + 18 \times 15$

        = 750

Mean of S = 750

Var (S) = $18^2 \times Var(X)$

Var(S) = $18^2 \times 4^2$

          = 5184

Variance of S = 5184

The standard deviation equals square root of 5184 = 72

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