Searching for Oil: expected number of successes, etc.

[MBAStats]

Happy Oil Company drills 200 wells in Alaska. The probability that each will be successful - that is, find a significant amount of oil - is 0.20.

a) What is the expected number of successful wells that the company will drill?
b) What is the probability that the company will drill more than 50 successful wells?
c) What is the probability that the company will drill less than 50 successful wells?

 

[galactus]

Use the normal approximation to the binomial distribution.

Start by finding the mean and standard deviation;

\(\displaystyle {\mu}=np=200(0.2)=40\)

\(\displaystyle {\sigma}=\sqrt{npq}=\sqrt{200(0.20)(0.80)}\approx{5.66}\)