The Poisson and Exponential Distributions Are Commonly Used In

question 100

Multiple Choice

The Poisson and exponential distributions are commonly used in:

• A) inventory models
• B) financial models
• C) failure analysis models
• D) all of these choices

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Definitions:

Inventory System

An inventory system is a mechanism for tracking the sale, purchase, and storage of goods, facilitating efficient management and control of inventory.

DSO

Days Sales Outstanding, a financial metric that calculates the average number of days it takes a company to collect payment after a sale has been made.

Compensating Balances

Minimum cash balances that a borrower agrees to maintain in a demand deposit account as a condition for a loan.

Transactions Balance

The amount of money held to facilitate day-to-day financial transactions, reflecting the liquidity needed for regular expenditures.