You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.30 a copy. You sell a copy of the San Pedro Times for $1.10. Daily demand is distributed normally with mean = 265 and standard deviation = 53. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of the San Pedro Times should you buy each morning? (Use Excel's NORM.S.INV() function to find the z value. Round your z value to 2 decimal places and final answer to the nearest whole number.) b. Based on a, what is the probability that you will run out of stock? (Round your answer to the nearest whole number.)
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.30 a copy. You sell a copy of the San Pedro Times for $1.10. Daily demand is distributed normally with mean = 265 and standard deviation = 53. At the end of each morning, any leftover copies are worthless and they go to a recycle bin.
a. How many copies of the San Pedro Times should you buy each morning? (Use Excel's NORM.S.INV()
b. Based on a, what is the
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