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Cool Rinks builds and operates outdoorice skatingfacilities. They are in the process of evaluating expansion opportunities. The first option is a new location in Indiana.
Cool Rinks builds and operates outdoorice skatingfacilities. They are in the process of evaluating expansion opportunities.
- The first option is a new location in Indiana. For the business to be profitable, the average daily temperature needs to be below 32 more than 75% of the time during the 90day skating season. At the site being considered, the average daily temperature during the season is normally distributed with a mean of 25 and a standard deviation of 11. Is Indiana a promising market for Cool Rinks?
- Now assume Cool Rinks has a second location under consideration in Utah. It is colder, with the average daily temperature during the season normally distributed with a mean of 14 and a standard deviation of 10. In addition to the 32 requirement, the company projects that a site will not be profitable if more than 40% of the days have an average temperature below 10. How does the Utah site compare to Indiana as a potential location for a new rink?
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