Answer:
11414.87205 units.
Explanation:
We have Underage cost cs to be $500
We have Overage cost Co to be $200
To get Critical fractile, we do this computation:
Cs/(Cs+Co)
500/(500+200)
500/700
0.714285714
Now the z score for this value,
normsinv(0.714285714)
= 0.565948821
To get what the question requires: mean+z-score*standard deviation
= 10000+(0.565948821*2500)
= 11414.87205 units
<u>please </u><u>note:</u><u> </u><u>I solved this without rounding the values.</u>
<u>We will have 10000+(0.57*2500)=11425 units</u><u> </u><u>if</u><u> </u><u>rounded</u>
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