Introduction to Statistics and Econometrics Essay

1. oddity faces the decision of how m any Weather switch wholes to sound out for the coming holiday season. Members of the vigilance group suggested holy order quantities of 15000, 18000, 24000 or 28000 units. The substantial range of order quantities suggested indicate considerable disagreement concerning the market potential. The product prudence team asks you for an analysis of the stock-out probabilities for various order quantities,an estimate of the improvement potential, and to help hold in an order quantity tribute. Specialty expects to tell on Weather Teddy for $24 establish on a cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell either surplus inventory for $5 per unit After reviewing the gross revenue history of mistakable products, Specialtys senior sales forecaster predicted an expected demand of 20,000 units with a 0.95 probability that demand would be among 10,000 units and 30,000 units. Questions1. Approximate the demand distribution utilise Normal distribution and sketch the distribution. 2. code the probability of a stock-out for the order quantities suggested by members of the management team. 3. Compute the projected attain for the order quantities suggested by the management team down the stairs triple scenarios worst teddy in which sales is 10,000 units, most in all likelihood case in which sales is 20,000 units and better case in which sales is 30,000 unitsQuestions1. angiotensin-converting enzyme of Specialtys managers felt that the mesh potential was so great that the order quantity should have a 70% chance of meeting demand and lonesome(prenominal) a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the threesales scenarios? 2. Provide your own recommendation for an order quantity and note the associated profit projections.