The marginal loss for a case of pumpkins is 40$ and the profit is $20 per case.

Question

The marginal loss for a case of pumpkins is 40$ and the profit is $20 per case. The mean sales is 4000 cases and standard deviation is 40. Assuming a normal distributed how many cases should be brought to market ILU, with a cost of $30. Assume UURS should the store stock? (3 pts) 000, 750, 1000, and 1250 is 0.25 each. How many 6) Th e m sales is 4,000 cases and standard deviation is 40. Assuming a normal distribution, how many cases should be brought to market? (6 pts) arginal loss for a case of pumpkins is $40 and the profit is $20 per case. The mean aiginal loSS40 Prob Of IOSS : 4000 40420 00

Explanation / Answer

ANSWER :-

First we have to calculate the value of p by using the formula

p = Marginal loss / (Marginal loss + Marginal profit)

p = 40/(40+20)

p = 40/60

p = 0.666

The area is equal to p is then shaded form the upper tail of the normal distribution.

By using the standardization formula we get Z = 0.430

Now Calculate the optimal stocking level by using the formula

Z = (X - mean sales) / standard deviation.

We are given mean sales = 4000 and standard deviation = 40

Z = (X - 4000) / 40

-0.430 = (X-4000)/40

-0.430 * 40 = X - 4000

X = 4000 - (0.430 *40)

X = 4000 - 17.2

X = 3982.8

Therefore 3983 units should be broughtt in the market.

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