Use the Appropriate Probability Model (Geometric)

question 4

Multiple Choice

Use the appropriate probability model (Geometric) .
-A specific automotive part that a service station stocks in its inventory has an 8%
Chance of being defective. Suppose many cars come into the service station needing this
Part each week. What is the expected number of parts retrieved until the first defective?

• A) 8
• B) 12.5
• C) 10.5
• D) 15
• E) 20

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Definitions:

Materials Requirements Planning

A production planning and inventory control system used to manage manufacturing processes by determining material requirements.

Derived Demand

Demand for a commodity, service, etc., that is a consequence of the demand for something else; for instance, the demand for steel is derived from the demand for automobiles.

Just-In-Time

An inventory strategy that aligns raw-material orders from suppliers directly with production schedules to minimize stock levels.

EOQ

Economic Order Quantity; the ideal order quantity a company should purchase to minimize its inventory costs, including holding, shortage, and order costs.