Question

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends more than a certain amount per visit at this supermarket. The expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $86 and a standard deviation of $16. If the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift? Round your answer to two decimal places.

Answer 1

Given 11 Mean Cue 86 SD (0) $16 From standard normal table -P(Z <z) = 104 c0.10 By using I-alpha table P(Z < 1.282) = 0.10

2 = 1.282 N We know tejat, X-M X-86 1-282 Z= 16 x = 1-282(16) +86 z 20.512 + 86 106.512 X = 106.51

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