Q: A sales division in a large IT consulting company prepares proposals and bids on engagements with companies who are considering purchasing new information systems. There is some randomness at work in this process, with varying numbers of competitors in each case and other factors affecting the customers’ decisions. Generally they win 20% of the contracts that they bid on. If you were to build a model of the division’s activity and wanted to include a random variable for winning contracts, what type of distribution would you use?
or
Q: A big IT consulting firm’s sales section drafts bids and proposals for engagements with businesses considering investing in new information systems. With different numbers of rivals in each scenario and other factors influencing the customers’ decisions, some randomness is involved in this process. They typically receive 20% of the contracts they bid for. What kind of distribution would you use to incorporate a random variable for winning contracts into a model of the division’s operations?
- Uniform
- Discrete
- Bernoulli
- All of these
- Normal
Explanation: The most appropriate type of distribution for modeling the random variable representing winning contracts in this case is Bernoulli.
