Unit Demand Probability


The demand for a   product of Carolina Industries varies greatly from month to month. Based on   the past 2 years of data, the following probability distribution shows the   company’s monthly demand. Unit Demand Probability   300 0.20   400 0.30   500 0.35   600 0.15   

A) If the company places monthly orders   equal to the expected value of the monthly   demand, what should Carolina’s monthly   order quantity be for this product?

  B) Assume that each unit demanded generates $70 dollars in revenue and that each unit   ordered costs $50 dollars. How much will   the company gain or loss in a month if it places an order based on your answer to   part a and the actual demand for the item is   300 units?   

C) What are the variance and the standard deviation for the number of units demanded?    


The mean is 180 lbs. with standard deviation of 25 lbs. Normally distributed. What is the probability of at least 3 out of 10 being greater than 180.

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