View the step-by-step solution to:

Cell Service Marisol is new to town and is in the market for cellular phone service. She has settled on Wildcat Cellular, which will give her a free...

Cell Service 
Marisol is new to town and is in the market for cellular phone service.  She has settled on Wildcat Cellular, which will give her a free phone if she signs a one‐year contract.  Wildcat offers several calling plans.  One plan that she is considering is called “Pick Your Minutes”.  Under this plan, she would specify 
a quantity of minutes, say x, per month that she would buy at 5¢ per minute.  Hence, her upfront cost would be $0.05x.  If her usage is less than this quantity x in a given month, she loses the minutes.  If her usage in a month exceeds this quantity x, she would have to pay 40¢ for each extra minute (that is, each minute used beyond x).  For example, if she contracts for x=120 minutes per month and her actual usage is 40 minutes, her total bill is $120  0.05 = $6.00.  However, if actual usage is 130 minutes, her total bill would be 
$120  0.05 + (130 – 120)  0.40 = $10.00.   
The same rates apply whether the call is local or long distance.  Once she signs the contract, she cannot change the number of minutes specified for a year. Marisol estimates that her monthly needs are best approximated by the Normal distribution, with a mean of 250 minutes and a standard deviation of 24 
minutes.  [Hint:  You might think about the problem this way:  if you pick too many minutes then you have “left over inventory” but if you pick too few minutes then you have “lost sales”.] 
 
 If Marisol chooses the “Pick Your Minutes” plan described above, how many minutes should she contract for? 

Sign up to view the entire interaction

Top Answer

Please find the... View the full answer

8410759.doc

Marisol is new to town and is in the market for cellular phone service. She has settled on Wildcat Cellular
, which will give her a free phone if she signs a one‐year contract. Wildcat offers...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online