[Solved] A trucking company operates in three regions of the country. The table below depicts the probability that each company truck is in the region and the fuel prices per gallon. What average amount should the company budget for a gallon of fuel across its operations? Round your answer to the nearest cent.
A trucking company operates in three regions of the country. The table below depicts the probability that each company truck is in the region and the fuel prices per gallon. What average amount should the company budget for a gallon of fuel across its operations? Round your answer to the nearest cent.
| Probability and Fuel Cost by Region | ||
| Region | Probability in Region | Fuel Cost per Gallon |
| Southeast | 20% | $3.10 |
| Southwest | 30% | $3.50 |
| California | 50% | $4.05 |
Solution: Average cost for a gallon is 20% of $3.10 + 30% of $3.50 + 50% of $4.05
Average cost for a gallon = 0.62 + 1.05 + 2.025
Average cost for a gallon = 3.695
Rounding the above value to the nearest cent, we get
3.695 ≃ $3.70
Hence, the company should budget $3.70 on average for a gallon of fuel across its operations.
Conclusion
A trucking company operates in three regions of the country. The table below depicts the probability that each company truck is in the region and the fuel prices per gallon. The company should budget $3.70 on average for a gallon of fuel across its operations.