Question

historically, demand has averaged 4602 units per week with a standard deviation of 581. the company currently has 3823 units in stock. what is the probability of a stockout?

Answer 1

To calculate the probability of a stockout, we can use the normal distribution and z-scores. The probability of a stockout would be approximately 0.0899, or 8.99%.

Step-by-step explanation:

To calculate the probability of a stockout, we can use the normal distribution and z-scores. First, we calculate the z-score using the formula:

z = (demand - mean) / standard deviation

Using the given information, the z-score is:

z = (3823 - 4602) / 581 = -1.34

We then use a z-table or a calculator to find the probability corresponding to the z-score. From the z-table, the probability of a stockout would be approximately 0.0899, or 8.99%.