[See Solution] A depot uses an imperfect method to estimate its inventory level: when the method under-estimates inventory, actual storage costs are higher
Question: A depot uses an imperfect method to estimate its inventory level: when the method under-estimates inventory, actual storage costs are higher than expected; when the method over-estimates inventory, operations cease too early when parts unexpectedly vanish.
Let the random variable:
X = Actual - Estimated Inventory
be normally-distributed with mean 0 and variance 9, i.e., \(X\sim N\left( 0,9 \right)\). Compute the chance that the method:
- Underestimates inventory by at least two
- Underestimates inventory by no more than two
- Overestimates inventory by at least three
- Overestimates inventory by no more than three
- Estimates the inventory to within ±4 units
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