Question

This question relates to concepts covered in Lectures 1 & 2. You can use any of the excel files posted to work through the question. Demand at a store can be modeled by a random variable which takes the following values across four different scenarios that occur with following probabilities. Scenario Low: D1 = 10 with probability P1=0. 1 Scenario Medium 1: D2 = 30 with probability P...2=0,4 Scenario Medium 2. D3 = 60 with probability p. 3-0.4 Scenario High: 04 = 90 with probability p_4=0.7 What is the mean of this demand distributional?

Answer 1

mean of this demand distribution = 100

Explanation:

To find the mean of this demand distribution;

Mean = Expected vale = E[x]

for discrete provability function,

we say E[x] = ∑(x.p(x))

x p(x) x.p(x)

10 0.1 1

30 0.4 12

60 0.4 24

90 0.7 63

∴ ∑(x.p(x)) = ( 1 + 12 + 24 + 63 )

∑(x.p(x)) = 100