The weekly demand for a company's product follows the probability distribution below. The expected value, or average, weekly demand is
A) 137.50.
B) 142.50.
C) 153.75.
D) 165.75

Question

The weekly demand for a company's product follows the probability distribution below.  The expected value, or average, weekly demand is
A) 137.50. 
B) 142.50. 
C) 153.75. 
D) 165.75

Quizplus · Accepted Answer

We can calculate the expected value by multiplying each possible demand by its probability, then summing these products. For example:
Expected demand = (100)(0.10) + (125)(0.20) + (150)(0.35) + (175)(0.25) + (200)(0.10) = 142.50
Therefore, the best choice is B.

The Weekly Demand for a Company's Product Follows the Probability