Question

In: Statistics and Probability

A bicycle shop plans to offer 2 specially priced children’s models at a sidewalk sale. The...

  1. A bicycle shop plans to offer 2 specially priced children’s models at a sidewalk sale. The basic model will return a profit of $120 and the deluxe model $150. Past experience indicates that sales of the basic model will have a mean of 5.4 bikes with a standard deviation of 1.2, and sales of the deluxe model will have a mean of 3.2 bikes with a standard deviation of 0.8 bikes. The cost of setting up for the sidewalk sale is $200.

    1. Define the random variables and use them to express the bicycle shop’s net profit.

    2. What’s the mean of the net profit?

    3. What’s the standard deviation of the net profit?

    4. Do you need to make any assumptions in calculating the mean? How about the standard deviation?

Solutions

Expert Solution

I have answered the question below

Please up vote for the same and thanks!!!

Do reach out in the comments for any queries

Answer:


Related Solutions

The Silver Spokes Bicycle Shop has decided to offer credit to its customers during the spring...
The Silver Spokes Bicycle Shop has decided to offer credit to its customers during the spring selling season. Sales are expected to be 700 bicycles. Silver Spokes will receive revenues with a present value of $1000 for each bicycle and will incur costs with a present value of $650 for each bicycle. a. What is the break-even probability of collection? What is the break-even probability of default? Draw the credit decision tree. b. If the Silver Spokes Bicycle Shop offers...
2.         From Unit 11:             Ray’s Gun Shop produces 2 models Macho and Rambo which yield...
2.         From Unit 11:             Ray’s Gun Shop produces 2 models Macho and Rambo which yield $ 2,700 and $ 3,600 as profits respectively. The three resources to produce these models are wood (W), steel (S) and labor (L).   The table below indicates the input-output relationship.             Units of input Required INPUTS Total Available Macho Rambo Wood (W) 9600 600 1200 Steel (S) 3000 300 300 Labor (L) 6300 900 0 Set up the LP problem and derive the optimal...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT