- #1
jackscholar
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The prices for bananes that a fruit shop would have to pay to keep them in stock have a mean of $1.35/kg and a standard deviation of 18 cents. The owner will not pay more than a certain price, but manages to keep stock 8% of the time. What is the maximum price the ownwer will pay?
I found 0.08 on a Z-score table and it was approximately Z=0.201. This is a negative number because it is less than the mean (or so i figured). I used the formula Z=(X-μ)/σ and re-arranged to get (-0.201*0.18)+1.35= price he is willing to pay. This then gave $1.31.
I found 0.08 on a Z-score table and it was approximately Z=0.201. This is a negative number because it is less than the mean (or so i figured). I used the formula Z=(X-μ)/σ and re-arranged to get (-0.201*0.18)+1.35= price he is willing to pay. This then gave $1.31.