The daily demand for a company's product follows the probability distribution below. The expected value, or average, weekly demand is
A) 41.50.
B) 45.50.
C) 47.75.
D) 51.75

Question

The daily demand for a company's product follows the probability distribution below.  The expected value, or average, weekly demand is
A) 41.50. 
B) 45.50. 
C) 47.75. 
D) 51.75

Quizplus · Accepted Answer

To find the expected value, we need to multiply each possible demand by its corresponding probability and then sum those products. 
Expected value (weekly demand) = (35)(0.05) + (40)(0.15) + (45)(0.30) + (50)(0.35) + (55)(0.15) 
Expected value (weekly demand) = 1.75 + 6.00 + 13.50 + 17.50 + 8.25 
Expected value (weekly demand) = 46 
Therefore, the best choice is B, with an expected value of 45.50.

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