Scenario 13.1 - Nefarious

question 51

Multiple Choice

Scenario 13.1 - Nefarious
The tenured professor routinely led student groups on factory tours in exotic locales,and one popular destination was an island south of Miami.The students enjoyed this happy little island and the professor liked it because he could supplement his income by bringing back a few boxes souvenirs he could sell to his friends.The souvenirs cost the professor $125 a box and he sells them for $290 a box.Souvenirs that dry out due to age can be sold for $80.Experience has shown that the demand for boxes of these souvenirs has a mean of 80 with a standard deviation of 20.
-Naturally,the professor will purchase the optimal number of boxes.(He's had a course or two in supply chain management and knows this model well. ) What is his expected profit from purchasing the optimal number of boxes?

• A)$11,975
• B)$11,455
• C)$11,165
• D)$10,835

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Definitions:

Specified Value

A particular or defined value, often set as a criterion or standard.

Null Hypothesis

A hypothesis in statistics that assumes there is no significant difference or effect and serves as the default assumption in a hypothesis test.

Significance Level

A threshold used in hypothesis testing to determine whether to reject the null hypothesis, typically expressed as a probability such as 0.05 or 5%.

Type II Error

The failure to reject a false null hypothesis, also referred to as a "false negative."