SOA Exam P Sample Question 223
Study guide: Exam P-1
A gun shop sells gunpowder. Monthly demand for gunpowder is normally distributed, averages 20 pounds, and has a standard deviation of 2 pounds. The shop manager wishes to stock gunpowder inventory at the beginning of each month so that there is only a 2% chance that the shop will run out of gunpowder (i.e., that demand will exceed inventory) in any given month.
Calculate the amount of gunpowder to stock in inventory, in pounds.
- A) 16
- B) 23
- C) 24
- D) 32
- E) 43
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