Mr. Hooper, owner of Modern Office Equipment, is concerned about freight costs a

Question

Mr. Hooper, owner of Modern Office Equipment, is concerned about freight costs and clerical costs incurred on small orders. In an effort to reduce expenditures in this area, he has decided to introduce a discount policy rewarding orders over $40 in the hope that this will cause customers to consolidate a number of small orders into large orders. The following data show the amounts per transaction for a sample of 28 customers: 10, 15, 20, 25, 15, 17, 41, 50, 5, 9, 12, 14, 35, 18, 19, 17, 28, 29, 11, 11, 43, 54, 7, 8, 16, 13, 37, 18....... A.) If the policy is successful, will the standard deviation of the distribution increase, decrease, or remain unaffected?............B.) Given the data above, forecast the amount of the next customer order..... PLEASE show how to get the answers for the forecasting
thank you!

Explanation / Answer

a)standard deviation will decrease because most of the customers will buy above $40 and all the data will be concentrated around 40 so deviations less b) calculate the expected value of all these data which is the mean of all the given data in this case to find the mean sum all the data and divide by the total no of data to get the next value

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