A Company That Receives Most of Its Orders by Telephone

question 51

Multiple Choice

A company that receives most of its orders by telephone conducted a study to determine how long customers were willing to wait on hold before ordering a product.The length of waiting time was found to be a variable best approximated by an exponential distribution with a mean length of waiting time equal to 2.8 minutes .What is the probability that a randomly selected caller is placed on hold fewer than 7 minutes?

• A)0.0009119
• B)0.082085
• C)0.917915
• D)0.9990881

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Definitions:

Fixed Overhead Volume Variance

The difference between the expected fixed overhead costs based on standard volume and the actual fixed overhead incurred.

Electrical Motor

A device that converts electrical energy into mechanical energy, widely used in various applications including appliances, industrial machinery, and vehicles.

Standard Machine-Hours

A predetermined measure of how long machines are expected to operate to complete a production task.

Overhead

General operating expenses of a business that are not directly attributable to a specific product or service, such as rent and utilities.