A soft-drink company produces 100,000 12-ounce bottles of soda per year. By adjusting a dial, the company can set the mean number of ounces placed in a bottle. Regardless of the mean, the standard deviation of the number of ounces in a bottle is 0.05 ounce. The soda costs 5 cents per ounce. Any bottle weighing less than 12 ounces will incur a $10 fine for being underweight. Determine a setting for the mean number of ounces per bottle of soda that minimizes the expected cost per year of producing soda. Your answer should be accurate within 0.001 ounce. Does the number of bottles produced per year influence your answer?
Answer to relevant QuestionsThe weekly demand for TVs at Lowland Appliance is normally distributed with mean 400 and standard deviation 100. Each time an order for TVs is placed, it arrives exactly four weeks later. That is, TV orders have a four-week ...In the SciTools example, make two changes: change all references to $115,000 to $110,000, and change all references to $125,000 to $130,000. Rework the EMV calculations and the decision tree. What is the best decision and ...Referring to the previous problem, another possible criterion is called expected regret. Here you calculate the regret for each cell, take a weighted average of these regrets in each row, weighted by the probabilities of the ...For each of the following, use a one-way data table to see how the posterior probability of being a drug user, given a positive test, varies as the indicated input varies. Write a brief explanation of your results. a. Let ...Following up on the previous problem, the expected net gain from information is defined as the expected amount gained by having access to the information, at its given cost, as opposed to not having access to the ...
Post your question