Question

A shopkeeper keeps stock of a popular brand of bread. Previous experience shows the daily demand pattern for the item with associated probabilities as follows:
Daily Demand : 0 10 20 30 40 50
Probability : 0.02 0.15 0.20 0.12 0.50 0.04
Simulate the demand for next 8 days for the following choice for random numbers
49 19 73 12 39 76 89 65.

Answer 1

Answer on Question #89720 – Economics | Other

1. A shopkeeper keeps stock of a popular brand of bread. Previous experience shows the daily demand pattern for the item with associated probabilities as follows:

Daily Demand: 0 10 20 30 40 50

Probability: 0.02 0.15 0.20 0.12 0.50 0.04

Simulate the demand for next 8 days for the following choice for random numbers

49 19 73 12 39 76 89 65.

Solution

Probability of demand of 50 which is 0.04 is restricted to 0.01 because cumulative probability cannot exceed 1

Range is obtained from probability values converted to percentages

Total demand for the next 8 days (last row table 2) = (40+20+40+10+30+40+40+40) =260

Answer: Average demand= 260/8=32.5 breads/day

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