Suppose we are analyzing the weekly demand for a given product that averages 1,500 units with a standard deviation = 800 units. Each product costs $10, and incurs a holding cost of 25% per year to carry inventory. The company has an opportunity to set up a warehouse in the local area to avoid the international shipping costs. Each order shipped from Europe currently incurs a fixed transportation and delivery cost of $10,000.

What is the probability that on any given week the demand will be greater than 2,300 units?

Select one:

a.

2.5%

b.

16%

c.

50%

d.

84%