# Probability Distribution of Total Losses

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(Please help me solve this problem and show all work and steps in completing it. Thank you.)

Ranger Inc. makes two shipments of products each month (shipment A and shipment B). The two shipments are made using the same mode of transportation and they are sent independantly of one other. (i.e., they are not shipped at the same time). Each shipment has a value of $1,500. From the past nformation, Ranger knows that there is a 18% that any given shipment will NOT arrive at its appointed destination. Note that when a shipment does not arrive, they will have a loss of $1,500.

a) Derive the probability distribution of total losses for each shipment per month. In other words, what is the probability distribution for total losses of shipment "A" and shipment "B" separately?

b) Derive the probability distribution of total losses for Ranger Inc. per month, RECOGNIZING THAT THEY ARE SENDING OUT TWO SHIPMENTS EACH MONTH. Hint: (You need to think of all the possible outcomes first, given that they are sending out two shipments per month)

Please show all the steps and work for completing this problem so that I know how to complete it in the future.

Thank you

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##### Solution Summary

Probability distribution of total losses are examined. The two shipments of products each months are given.

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