In performing a symmetric approximation, you calculate a meanof the total system cost as $1,725K. The varianceis 22500. The POE is $1,600K. What is the probabilityof overrunning the POE?
In order to answer this question, it is necessary to make some assumption about the probability distribution function of the total system cost. We shall assume a normal distribution, since it’s the most common distribution used in this type of problem.
Let’s call X the total system cost. The problem asks us to find Prob(X > 1600) (i.e., the probability that the cost will be higher than 1600), knowing that …