Karen supplements her income by making a necklace that she sells online. Orders for the necklace occur randomly at a rate of one order per every 30 hours, on average. Karen is planning a trip which will take her “off the grid” for 84 hours. She is leaving her house at 6am on Monday morning and will return Thursday afternoon at 2pm. As she leaves on Monday morning, she has filled all orders and has an inventory of 4 necklaces. She gives her husband instructions to fill any orders that come in while she is away (up to a maximum of 4).
What would be the parameter of this exponential distribution?
November 30th 2009, 04:00 PM
Depends on what the "block" of time you are using. If you are using a block of time of 84 hours, then you need to figure out how many necklaces one would expect to sell in that amount of time.
I assume the question is something a long the lines of "what're the chance stock runs out. . ." or something similar?