Acme Taxi has two taxi cabs. The manager tracks the daily revenue for each cab. Over the past 20 days, Cab A has averaged $76.00 per night with a standard deviation equal to $11.00. Cab B has averaged $200.00 per night with a standard deviation of $18.00. Based on this information, Cab B has the greatest relative variation.

Question

Quizplus · Accepted Answer

Relative variation is calculated as the standard deviation divided by the mean. For Cab A, the relative variation is $11.00 / $76.00 ≈ 0.145. For Cab B, it is $18.00 / $200.00 = 0.09. Therefore, Cab A has the greater relative variation.

Acme Taxi Has Two Taxi Cabs