The demand for a product varies from month to month. Based on the past year's data, the following probability distribution shows MNM company's monthly demand.
$$\begin{array} { c c }
\text { x } & \text { fx) } \
\text { Unit Damand } & \text { Prabability } \
0 & 0.10 \
1,000 & 0.10 \
2,000 & 0.30 \
3,000 & 0.40 \
4.000 & 0.10
\end{array}$$
a. Determine the expected number of units demanded per month.
b. Each unit produced costs the company $8.00, and is sold for $10.00. How much will the company gain or lose in a month if they stock the expected number of units demanded, but sell 2000 units?

Question

The demand for a product varies from month to month. Based on the past year's data, the following probability distribution shows MNM company's monthly demand.
 $$\begin{array} { c c } 
\text { x } & \text { fx) } \
\text { Unit Damand } & \text { Prabability } \
0 & 0.10 \
1,000 & 0.10 \
2,000 & 0.30 \
3,000 & 0.40 \
4.000 & 0.10
\end{array}$$ 
a. Determine the expected number of units demanded per month.
b. Each unit produced costs the company $8.00, and is sold for $10.00. How much will the company gain or lose in a month if they stock the expected number of units demanded, but sell 2000 units?

Quizplus · Accepted Answer

The Answer of The demand for a product varies from month to month. Based on the past year's data, the following probability distribution shows MNM company's monthly demand.
 $$\begin{array} { c c } 
\text { x } & \text { fx) } \
\text { Unit Damand } & \text { Prabability } \
0 & 0.10 \
1,000 & 0.10 \
2,000 & 0.30 \
3,000 & 0.40 \
4.000 & 0.10
\end{array}$$ 
a. Determine the expected number of units demanded per month.
b. Each unit produced costs the company $8.00, and is sold for $10.00. How much will the company gain or lose in a month if they stock the expected number of units demanded, but sell 2000 units?

The Demand for a Product Varies from Month to Month