Recently the movement of orders has not gone as planned and
Recently, the movement of orders has not gone as planned, and there were a large number of complaints. Bud Owens, director of customer service, has completely redone the method of order handling. The goal is to have fewer than 5 unfilled orders on hand at the end of 90% of the working days. Frequent checks of the unfilled orders at the end of the day reveal that the distribution of unfilled orders follows a Poisson distribution with a mean of two orders. Has New Process, Inc. lived up to its internal goal? Mr. Owens wants some evidence to support your answer.
Please work the calculations out so I actually know how to do the problem!
Solution
Note that P(fewer than x) = P(at most x - 1).
Using a cumulative poisson distribution table or technology, matching
u = the mean number of successes = 2
p = the probability of a success = 0
x = our critical value of successes = 5
Then the cumulative probability of P(at most x - 1) from a table/technology is
P(at most 4 ) = 0.947346983
Which is also
P(fewer than 5 ) = 0.947346983 [PROBABILITY]
As this is greater than 90%, then YES, it has lived up to its internal goal. [ANSWER]
