Suppose that the demand for a companySolutionFirst find the

Suppose that the demand for a company

Solution

First, find the variance for the 3 weeks by squaring the standard deviations. Then add them to get the variance for the three week period.

Variance (3 week) = 10^2 + 5^2 + 15^2 = 350
Standard deviation (3 week) = sqrt(variance) = sqrt(350) = 18.7

Now you know that the 3 week period has mean 160 with standard deviation 18.7, which is enough to calculate the z-score.

Z = ( value - mean ) / sdev = ( 180 - 160 ) / 18.7 = 1.07

Look that up on your normal distribution table and you find .8577, which you interpret as 85.77% of the time 180 units will be sufficient. Company will run out 14.23% of the time.