Thread: SOA sample #102
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Old 10-08-2017, 07:53 PM
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Ren_St Ren_St is offline
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Isn't retained repair cost K ^ 1?

So for example,

k=0, retained repair cost = 0, Probability=0.4
k=1, retained repair cost = 1 Probability=0.3
k=2, retained repair cost = 1 Probability=0.2
k=3, retained repair cost = 1 Probability=0.1

What can't we say the expected retained repair cost is E(K ^ 1)=0.6 for each factory since

E(K)= 1 = E(K ^ 1) + E((K-1)+) and ((K-1)+)=0.4?

This is super confusing to me

Last edited by Ren_St; 10-08-2017 at 08:07 PM..
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