Question

The owners of a seafood restaurant are planning to follow the strategy of using the mean (14.16) to guide them in terms of deciding how many 2 lb fresh lobster platters to serve, per supper evening, in the next month. Under what conditions - a large standard deviation or a small standard deviation - would they be more likely to experience severe problems relating to: either preparing insufficient lobster platters to supply demand or preparing way too many lobster platters, resulting in a lot of food waste? Explain. (The standard deviation for this problem was calculated at 2.39). Thank you

Answer 1

Hello

They will be more likely to experience severe problems under a Large Standard Deviation.

Standard Deviation quantifies the amount of variation of data points from its central location, i.e. mean.

High Standard Deviation(S.D.) means that the data points show large variations from its mean, i.e. the scatterness and Low Standard Deviation means that the data points are not varying from each other that much, i.e. their closeness.

Hence, in case of Large S.D., there will be more data points that will vary largely from the mean and there will be data points that will vary largely from the mean, i.e. more points varying largely or some points with too large variations and in case of Small S.D., there will be less of such points annd less of such variance.

From, this study, we can undertake our given situation.

As the seafood restaurants are planning to guide themselves using mean(14.16), under large standard deviation, they will be more likely to experience problems of insufficient supply or insufficient demand as under large standard deviation, there will be more cases of demand being distant from the mean, i.e. 14.16 and there will be cases of demand varying largely from the mean, i.e. 14.16.

I hope this solves your doubt.

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