Daily Usage Is Exactly 60 Gallons Per Day

question 103

Multiple Choice

Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a standard deviation of 2 days. What is the standard deviation of demand during lead time?

• A)60 times 2
• B)60 times the square root of 2
• C)60 times the square root of 10
• D)60 times 10
• E)10 times the square root of 2

---

Definitions:

Cost Function

A mathematical relationship that describes how production costs change with variations in output level.

Reaction Curves

Graphs showing how one firm’s optimal output decision responds to quantities of output by competing firms in a market.

Simultaneous Equations

A set of equations containing multiple variables that are all solved together.

Cross-License

An agreement between two or more parties to grant mutual rights to their respective intellectual property.