# Question: A retailer purchases a batch of 1000 fluorescent light bulbs

A retailer purchases a batch of 1000 fluorescent light bulbs from a wholesaler at a cost of $2 per bulb. The wholesaler agrees to replace each defective bulb with one that is guaranteed to function properly for a charge of $0.20 per bulb. The retailer sells the bulbs at a price of $2.50 per bulb and gives his customers free replacements if they bring defective bulbs back to the store. Let X be the number of defective bulbs in a typical batch, and assume that the mean and standard deviation of X are 50 and 10, respectively.

a. Find the mean and standard deviation of the profit (in dollars) the retailer makes from selling a batch of light bulbs.

b. Find an interval with the property that the retailer can be approximately 95% sure that his profit will be in this interval.

a. Find the mean and standard deviation of the profit (in dollars) the retailer makes from selling a batch of light bulbs.

b. Find an interval with the property that the retailer can be approximately 95% sure that his profit will be in this interval.

**View Solution:**## Answer to relevant Questions

A business manager who needs to make many phone calls has estimated that when she calls a client, the probability that she will reach the client right away is 60%. If she does not reach the client on the first call, the ...Consider the probability distribution of the weekly demand for copier paper (in hundreds of reams) used in a corporationâ€™s duplicating center, as shown in the file S04_58.xlsx.a. Use simulation to generate 500 values of ...Suppose there are three states of the economy: boom, moderate growth, and recession. The annual return on Honda and Toyota stock in each state of the economy is shown in the file S04_66.xlsx.a. Calculate the mean and ...Imagine that you are trying to predict the price of gasoline (regular unleaded) and the price of natural gas for home heating during the next month. Assume you believe that the price of either will stay the same, go up by ...The application at the beginning of this chapter describes the campaign McDonaldâ€™s used several years ago, where customers could win various prizes.a. Verify the figures that are given in the description. That is, argue ...Post your question