The demand for a product varies from month to month. Based on the past year\'s d
ID: 2956155 • Letter: T
Question
The demand for a product varies from month to month. Based on the past year's data, the following probability distribution shows MNM company's monthly demand.x F(x) Unit Demand Probability
0 0.10
1,000 0.10
2,000 0.30
3,000 0.40
4,000 0.10
a. Determine the expected number of units demanded per month.
b. Each unit produced cost the company $8.00, and is sold for $10.00. How much will the company gain or lose in a month if they stock the expected number of units demanded, but sell 2000 units? The demand for a product varies from month to month. Based on the past year's data, the following probability distribution shows MNM company's monthly demand.
x F(x) Unit Demand Probability
0 0.10
1,000 0.10
2,000 0.30
3,000 0.40
4,000 0.10
a. Determine the expected number of units demanded per month.
b. Each unit produced cost the company $8.00, and is sold for $10.00. How much will the company gain or lose in a month if they stock the expected number of units demanded, but sell 2000 units?
Explanation / Answer
a)
The expected number of units demanded per month is mean = total of the last column =Sx*f(x) = 2300 b) the company produced 2300 units, so the production cost is 2300*8=18400 the company sold 2000 units, so the amount is 2000*10=20000 so, the gain is 20000-18400 = 1600 the company sold 2000 units, so the amount is 2000*10=20000 so, the gain is 20000-18400 = 1600
x f(x) x*f(x) 0 0.1 0 1000 0.1 100 2000 0.3 600 3000 0.4 1200 4000 0.1 400 Total 1.0 2300
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