3.a. On average a supermarket sells 500 litres of milk a day with a standard deviation of 50 litres. If the supermarket has 600 litres in stock at the beginning of a day, i. what is the probability that it will run out of milk? ii. What is the probability that demand is between 450 and 600 litres in a day? iii. How many litres should the supermarket stock if it wants the probability of running out to be 0.05?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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