Irwin's sells a particular model of fan, with most of the sales being made in the summer
Question:
a. Estimate the mean and the variance of the demand for fans each summer.
b. Assume that the demand for fans each summer follows a normal distribution, with mean and variance given by what you obtained in part (a). Determine the optimal number of fans for Irwin's to buy prior to each summer season.
c. Based on the observed 10 values of the prior demand, construct an empirical probability distribution of summer demand and determine the optimal number of fans for Irwin's to buy based on the empirical distribution.
d. Based on your results for parts (P) and (c). would you say that the normal distribution provides an adequate approximation?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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