On a Good Day a Distributor Will Have $5,000 of Inventory

question 21

Multiple Choice

On a good day a distributor will have $5,000 of inventory sales;on a medium day sales of $3,000;on a bad day only $1,000.Suppose you have data on this distributor's sales for the past 100 days and that she had 25 good days,50 medium days and 25 bad days.If you draw a random number to represent her sales for the first simulated day and that number were 89,which of the following were her simulated sales? (Note: arrange the random number interval probability distribution so it starts with a good day at 00 followed by a medium day,etc.

• A)$5,000
• B)$3,000
• C)$2,500
• D)$1,000
• E)Can not be determined

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Definitions:

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent or salaries.

Net Income

The amount of money left after subtracting all expenses, taxes, and costs from total revenue.

Variable Cost

A cost that varies depending on the level of output or activity, such as materials or labor costs in manufacturing.

Fixed Cost

A periodic cost that does not vary with production volume or sales.