OPERATIONS MANAGEMENT (LL)-W/ACCESS
OPERATIONS MANAGEMENT (LL)-W/ACCESS
17th Edition
ISBN: 9781260037821
Author: CACHON
Publisher: MCG
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Textbook Question
Chapter 14, Problem 1CQ

Demand in each period follows the same normal distribution (i.e., there is one demand distribution that represents demand in any single period). Assuming demand is independent across periods, which of the following statements about mean demand over five periods is true?

  1. a. It equals the mean of demand over one period.
  2. b. It is greater than the mean of demand over one period but less than five times the mean of demand over one period.
  3. c. It equals five times the mean of demand over one period.
  4. d. It is even more than five times the mean of demand over one period.
Expert Solution & Answer
Check Mark
Summary Introduction

To identify: The statement that is true regarding the mean demand over five periods.

Explanation of Solution

Correct option: (c)

Correct answer:

It equals five times the mean of demand over one period.

Justification:

The demand follows the same normal distribution over the five periods. It is also assumed that the demand is independent across the periods. The mean of demand across multiple periods will be equal to the sum of the means of the demand of the individual periods. All the periods will have the same mean demand. Therefore, the demand over 5 periods will be equal to 5 times the demand in a single period.

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