Chapter 6 case 4

# Chapter 6 case 4 - Chapter 6 Continuous Probability...

This preview shows pages 1–3. Sign up to view the full content.

Chapter 6 Continuous Probability Distributions Chapter 6 Continuous Probability Distributions Case Problem: Specialty Toys 1. Information provided by the forecaster At x = 30,000, 30,000 20,000 1.96 x z μ σ - - = = = 30,000 20,000 5102 1.96 - = = Normal distribution 20,000 = 5102 = 2. @ 15,000 15,000 20,000 0.98 5102 z - = = - P(stockout) = 0.3365 + 0.5000 = 0.8365 @ 18,000 18,000 20,000 0.39 5102 z - = = - P(stockout) = 0.1517 + 0.5000 = 0.6517 @ 24,000 24,000 20,000 0.78 5102 z - = = P(stockout) = 0.5000 - 0.2823 = 0.2177 CP - 18 20,000 . 10,000 30,000 . .

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Chapter 6 Continuous Probability Distributions @ 28,000 28,000 20,000 1.57 5102 z - = = P(stockout) = 0.5000 - 0.4418 = 0.0582 3. Profit projections for the order quantities under the 3 scenarios are computed below: Order Quantity: 15,000 Sales Unit Sales Total Cost at \$24 at \$5 Profit 10,000 240,000 240,000 25,000 25,000 20,000 240,000 360,000 0 120,000 30,000 240,000 360,000 0 120,000 Order Quantity: 18,000 Sales Unit Sales
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 08/08/2011 for the course ECON 340 taught by Professor Doyle during the Spring '11 term at Ill. Chicago.

### Page1 / 4

Chapter 6 case 4 - Chapter 6 Continuous Probability...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online