Description
- The purpose of this assignment is to know how to apply normal probability distribution concepts to a real business case.
AS Instructions:
- Read the case of specialty toys at the end of Chapter 6 in its entirety.
- Describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its mean and standard deviation.
- Compute the probability of a stock-out for the order quantities suggested by members of management team.
- Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.
- The order quantity should have a 70% chance of meeting demand and only a 30% chance of stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios?
2.Unit 4 Lab Assignment 2 instructions:
The American Automobile Association (AAA) reported that families planning to travel over the labor day weekend would spend an average of $749. Assume that the amount spent is normally distributed with a standard deviation of $225. Answer the following questions:
- What is the probability of family expenses for being less than $400?
- What is the probability of family expenses for being $800 or more?
- What is the probability that family expenses will be between $500 and $1000?
- What would be the Labor Day weekend expenses have to be for the 5% of the families with the most expensive travel plans?