Rainy Days, a small shop in Seattle retails two types of umbrellas: Simple Drizzle and Bubble Enclosure. They purchase both of the umbrellas from the same supplier for $11 per u…

Question

asked Dec 2, 2021 21.6k views

Rainy Days, a small shop in Seattle retails two types of umbrellas: Simple Drizzle and Bubble Enclosure. They purchase both of the umbrellas from the same supplier for $11 per unit and sell them both for $15 per unit. Because Rainy Days has operated for 10 years selling this merchandise, they know the demands for both Simple Drizzle and Bubble Enclosure are normally distributed with a mean of 300. The demand for Simple Drizzle has a standard deviation of 40. The demand Bubble Enclosure has a standard deviation of 70. Based upon this information which umbrella (Simple Drizzle or Bubble Enclosure) would present the greater forecasting challenge?

a) Bubble Enclosure presents the greater forecasting challenge because its demand has a higher variation while having the same mean.
b) Bubble Enclosure presents the greater forecasting challenge because it has a smaller variation while having the same mean.
c) Simple Drizzle presents the greater forecasting challenge because it has a higher variation while having the same mean.
d) Simple Drizzle presents the greater forecasting challenge because it has a smaller variation while having the same mean.
e) Both umbrellas present the same forecasting challenge because they have the same mean.
f) Cannot be determined from the information provided.