A consumer electronics store stocks five alarm clock radios. If it has fewer than five clock radios available at the end of a week, the store restocks the item to bring the in-stock level up to five.
If the weekly demand is greater than the five units in stock, the store loses sales. The radio sells for $27 and costs the store $12.
The manager estimates that the probability distribution of weekly demand for the radio is as shown in the provided data table.
Complete parts a through d below.
a. What is the expected weekly demand for the alarm clock radio?
The expected weekly demand is:
(Type an integer or a decimal. Do not round.)
b. What is the probability that the weekly demand will be greater than the number of available radios?
The probability is:
(Type an integer or a decimal. Do not round.)
c. What is the expected weekly profit from the sale of the alarm clock radio? (Remember: There are only five clock radios available in any week to meet demand.)
The expected weekly profit is:
(Round to the nearest cent as needed.)
d. On average, how much profit is lost each week because the radio is not available when demanded?
The expected weekly profit lost is:
(Round to the nearest cent as needed.)
Data:
Weekly_Demand Probability
0 0.06
1 0.08
2 0.1
3 0.19
4 0.33
5 0.14
6 0.06
7 0.04
