Question

Bottleco produces six-packs of soda cans. Each can is supposed to contain at least 12 ounces of soda. If the total weight in a six-pack is under 72 ounces, Bottleco is fined $100 and receives no sales revenue for the six-pack. Each six-pack sells for $3.00. It costs Bottleco $0.02 per ounce of soda put in the cans. The amount put in each can by a machine is normally distributed with standard deviation 0.10 ounce. Bottleco can control the mean fill rate of its soda-filling machines. Assume that the weight of each can in a six-pack has a 0.8 correlation with the weight of each of the other cans in the six-pack. Run simulations with mean fill quantities from 12.10-12.30 in increments of 0.02. Find the mean and standard deviation of the expected profit per six-pack for each simulation. Which of the following answers results in the highest expected profit per six-pack compared to the other answers?a. 12.10 b. 12.16 c. 12.22 d. 12.28

Answer 1

Answer:

Explanation:

The correlation between each can in a six-pack and weight of the other cans in the six-pack is 0.8

Mean fill quantities from 12.10-12.30 in increments of 0.02

The expected profit = (12.10+12.30) /2 ) +0.02

=12.22

The expected profit is 12.22.

The correct answer is  ( C ) 12.22