Question
Suppose that the demands for a company's product in weeks 1, 2, and 3 are each normally distributed. The means are 50, 45, and 70.
Suppose that the demands for a company's product in weeks 1, 2, and 3 are each normally distributed. The means are 50, 45, and 70. The standard deviations are 10, 5, and 15. Assume that these three demands are probabilistically independent.
A. Suppose that the company currently has 180 units in stock, and it will not be receiving any more shipments from its supplier for at least three weeks. What is the probability that stock will run out during this three-week period? Round your answer to three decimal places, if necessary.
B. How many units should the company currently have in stock so that it can be 98% certain of not running out during this three-week period? Again, assume that it won't receive any more shipments during this period. Round your answer up to the nearest whole number, if necessary.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started