Business Data Model Essay

3129 Words Nov 26th, 2010 13 Pages
Business Decision Models ____________________________________________________________

________________________ Question 1 (10 marks)
Sandra Enright of Techtronics Inc., an electronics supply firm, has been examining the times required for stock pickers to fill orders requested from inventory. She has determined that individual order-filling times approximately follow a normal distribution with a mean value of 3.2 minutes and standard deviation of 68 seconds.
a) What is the probability that a randomly selected order will require more than three minutes? b) What is the probability that a randomly selected order will require less than two minutes? c) What is the
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In answering the following questions, you may assume that these parameters are known exactly. a) What is the probability that a randomly selected order will require more than six days? b) What is the probability that a randomly selected order will require between three and six days? c) The company is considering a $50 cash-back guarantee on any orders that have delivery times longer than a specified maximum but are not sure what maximum time to guarantee. They would be willing to pay out the guarantee on no more than 3% of their deliveries. What time limit in whole days should they set for their guarantee? d) What is the probability that the mean time for a sample of fifteen randomly selected orders will be more than six days?

Assignment One - Solutions Question 1 a) 1 – NORMDIST(3,3.2,1.133,1) = 0.57 b) NORMDIST(2,3.2,1.133,1) = 0.1448 c) NORMDIST(3,3.2,1.133,1) – NORMDIST(2,3.2,1.133,1) = 0.2851 d) =NORMINV(0.95,3.2,1.133) = 5.064 minutes Question 2 Part a

Part b Daily profit is quite good at about $329, but note that the standard deviation is large by comparison at about $794. Gerald can thus expect to experience a lot of volatility in his profits. Question
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