Find and Interpret the Area Under a Normal Curve

question 8

Multiple Choice

Find and Interpret the Area under a Normal Curve
-A new phone system was installed last year to help reduce the expense of personal calls that were being made by employees. Before the new system was installed, the amount being spent on personal calls followed a normal distribution with an average of $800 per month and a standard deviation of $50 per month. Refer to such expenses as PCE s (personal call expenses) . Using the distribution above, what is the probability that a randomly selected month had a PCE of between $675.00 and $890.00

• A) 0.9579
• B) 0.0421
• C) 0.9999
• D) 0.0001

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Definitions:

Annual Demand

The total quantity of a product or service that consumers are willing and able to purchase over the course of a year.

Carrying Cost

The expenses incurred by holding inventory or assets, including storage, insurance, and opportunity costs.

Order Costs

Expenses associated with making and processing an order for goods or services.

Economic Order Quantity

The optimal quantity of stock that minimizes the total costs associated with ordering and holding inventory.