Answered: University of Florida football programs…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

University of Florida football programs are
printed 1 week prior to each home game. Attendance averages
90,000 screaming and loyal Gators fans, of whom two-thirds
usually buy the program, following a normal distribution, for
$4 each. Unsold programs are sent to a recycling center that
pays only 10 cents per program. The standard deviation is
5,000 programs, and the cost to print each program is $1.
a) What is the cost of underestimating demand for each
program?
b) What is the overage cost per program?
c) How many programs should be ordered per game?
d) What is the stockout risk for this order size?

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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