Answered: A home improvement store sells boxwood…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A home improvement store sells boxwood shrubs during the spring planting season. Each boxwood sells for $35 and it costs the store $13 to purchase and transport each boxwood from its supplier. At the end of the season, any remaining boxwoods are sold to a local landscaper at a deep discount for $5/boxwood. In the upcoming season, demand for boxwoods is forecast to be normally distributed with a mean of 1,000 and a standard deviation of 200 (you may assume demand is continuous). If the store can only order once at the beginning of the season, how many boxwoods should be stocked?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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