Woot! specializes in “one day - one deal” selling. Every day they sell a product
ID: 442704 • Letter: W
Question
Woot! specializes in “one day - one deal” selling. Every day they sell a product that is not available the next day. If the item sells out, all the excess demand is lost and if items are left over, they are salvaged and not sold again on a future day. On a particular Monday, Woot! sells Creative Labs blue-tooth adapter for only $15, buying them at $9 each. All unsold adapters are sent back to the supplier at $7 each. Woot! estimates demand to be normally distributed with mean 500 and standard deviation of 70 units.
1.What is the probability they sell fewer than 430 adapters?
A. 32.3% B. 15.8% C.9.3% D.
2.3%
What is the overage cost? A. $9 B. $6 C. $2 D. $7
What is the underage cost? A. $9 B. $7 C. $6 D. $15
What is the critical ratio? A. 1.00 B. 1.25 C. .66 D. .75
How many adaptors should they order? A. 552.5 B. 500.3 C. 600.9 D. 547.6
Explanation / Answer
1. A
2. A
3.B
4. d
5. d
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