SOLUTION: The monthly sales of mufflers in the Richmond, VA area follow the normal distribution with a mean of 1200 and a standard deviation of 225. The manufacturer would like to establish

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Question 948603: The monthly sales of mufflers in the Richmond, VA area follow the normal distribution with a mean of 1200 and a standard deviation of 225. The manufacturer would like to establish inventory levels such that there is only a 5% chance of running out of stock. Where should the manufacturer set the inventory levels?
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The monthly sales of mufflers in the Richmond, VA area follow the normal distribution with a mean of 1200 and a standard deviation of 225. The manufacturer would like to establish inventory levels such that there is only a 5% chance of running out of stock. Where should the manufacturer set the inventory levels?
P(Z > 1.645) = 0.05
Therefore, inventory level should be at least
1.645*sd + mean = 1.645*225 + 1200 ≈ 1571 (rounded up) [Answer]