A retailer finds that the demand for a very popular board game averages 100 per week with a standard deviation of 20.If the seller wishes to have adequate stock 95% of the time,how many of the games must she keep on hand?
A) 139.2
B) 100.0
C) 132.9
D) 195.0
E) 125.6

Question

Quizplus · Accepted Answer

To calculate the number of games the seller should keep on hand, we need to find the Z-value that corresponds to a 95% probability (since the demand is normally distributed). From the standard normal distribution table, we can see that the Z-value for a 95% probability is 1.645.

Next, we use the formula:

Stock level = Average demand + Z-value * Standard deviation

Stock level = 100 + 1.645 * 20

Stock level = 132.9

Therefore, the seller should keep 133 games on hand to have adequate stock 95% of the time. The closest option is C (132.9), which should be rounded up to 133.

A Retailer Finds That the Demand for a Very Popular