Answered: [item no. 11] In a single period…

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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[item no. 11] In a single period inventory model, the demand is assumed to follow a normal distribution. The value of ML/(ML+MP) is 0.6. The company used marginal analysis with the normal distribution to determine the optimal stocking level X*. If the mean demand is 100, then X*

a. is less than 100

b. is equal to 100

c. cannot be determined from the information given

d. is greater than 100

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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