An analyst wants to simulate weekly demand during a work week for a product whose daily demand follows normal distribution with mean 300 and standard deviation 100. The following 5 random normal deviates were chosen to help simulate the demand for five working days: 1.2, -.7, -2.2, 1.4, and 1.8. The weekly demand will be
A) 420
B) 1650
C) 1500
D) 1710

Question

Quizplus · Accepted Answer

The weekly demand is calculated by transforming the random normal deviates into actual demand values using the formula: demand = mean + (deviate * standard deviation). For each day, the demand is calculated as follows: Day 1: 300 + (1.2 * 100) = 420 Day 2: 300 + (-0.7 * 100) = 230 Day 3: 300 + (-2.2 * 100) = 80 Day 4: 300 + (1.4 * 100) = 440 Day 5: 300 + (1.8 * 100) = 480 Adding these up gives a weekly demand of 1650.

An Analyst Wants to Simulate Weekly Demand During a Work