The probability distribution of X can be modeled using the binomial distribution.

The number of regions (number of trials) n = 3

The probability of forest fire in a region (success probability) p = 0.3
 
n x
P (X = x) = p (1 − p)n−x , for x ∈ {0, 1, 2, 3}, n = 3, p = 0.3 (1)
x

The probability distribution of X is given in Table 4.

Table 4: Probability distribution of X

x P(X = x)
0 0.343
1 0.441
2 0.189
3 0.027

b. P (X = 0) = 0.343
c. P (X = 3) = 0.027
d. X
E[X] = xP (X = x) = np = 3 × 0.3 = 0.9
all x

e. Let Y = 20X be the random variable representing the amount in damages and other expenses caused
by major forest fires in X number of regions.
E[Y ] = E[20X] = 20E[X] = 20 × 0.9 = 18 million dollars.

Chapter-4: Problem-25
a. Let X be the number of AC units left at the end of the week. Let Y be the number of special stockout
orders required. The probability distribution of X is given in Table 6. The probability distribution of Y
is given in Table 7.

Table 5: Extracting the probability distribution of leftover units and stockout orders.

Number demanded X (# leftover units) Y (# stockout orders) Probability

0 5 0 0.05
1 4 0 0.05
2 3 0 0.08
3 2 0 0.16
4 1 0 0.30
5 0 0 0.16
6 0 1 0.10
7 0 2 0.05
8 0 3 0.05
>=9 0 >=4 0.00

b. X
E[X] = xP (X = x) = 1.31
all x
X
E[Y ] = yP (Y = y) = 0.35
all y