Statistics Problem

Problem 2 (10 marks)

The daily demand for TVs at TVWorld is normally distributed with mean 400 and standard deviation

100. Each time an order for TVs is placed. It takes exactly 4 days to arrive, i.e. TV orders have a 4-day

lead time. TVWorld does not want to run out of TVs during more than 1% of all lead times. How low

should TVWorld let its TV inventory drop before it places an order for more TVs?

State clearly your assumptions and show all working.