Electric Power Cords Are a Common Hazard in Households with Computers

question 33

Essay

Electric power cords are a common hazard in households with computers. They are
easily tripped over and the delicate computer equipment may be pulled from tables
and damaged. A new "breakaway" power cord has been designed by Alpha
Enterprises. Alpha has determined that a breakaway force of between 3.0 and 5.0
pounds is appropriate. (If the force is too low the cord would break in normal use; if
the force is too high the cord would not be effective.) Alpha can order cord material
from two companies, Beta and Gamma. The breakaway force for the Beta material
is approximately normally distributed with a mean of 4.5 pounds and a standard
deviation of 1.0 pounds. The breakaway force for the Gamma material is
approximately normally distributed with a mean of 4.0 pounds and a standard
deviation of 1.5 pounds.
Alpha will choose the cord material that has the higher probability of breaking within
the specified 3.0 and 5.0 pound limits. From which company should Alpha order
cord material? Provide appropriate statistical justification for your choice.

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Definitions:

Inventory Turnover

An indicator that measures the frequency at which a company's inventory cycles through sales and restocking within a given period.

Sales

The transactions involving the exchange of goods or services for money, reflecting a key revenue source for businesses.

Beginning Inventory

The financial value of stock ready for market at the beginning of a bookkeeping period.

Average Inventory

An estimation of the value of inventory over a certain time period, typically calculated by averaging the inventory levels at the beginning and end of the period.