Statistics Homework Solutions
Problem
#11140

probability and decision making

Norm Dickins the town pharmacist is interested in obtaining a loan to expand his business.  He will get a better interest rate if he can reasonably demonstrate that his near-term monthly revenues will be between $10,000 and $15,000.  He doesn't know the exact level of sales to expect over the next several months, but based on past experience, he knows it should be around $13,000.  He also knows that his sales vary by about $2,500 from month to month.  What is the probability that his store will generate the revenue required for him to obtain a favorable loan rate?

I don't know how to attack this...these are the methods I have studied (and would therefore be eligible to be used)...


Techniques and possible representative applications:
-Confidence intervals and hypothesis testing
-Decision trees (and their use in solving managerial problems),
-Critical fractile analysis (and its use in determining optimal demand levels),
-Analysis of variance/ANOVA (and its use in understanding differences between group means),
-Chi-square (cross tabs/contingency table) analysis (and its use in determining differences between group proportions),
-Regression, single and multiple (and its use in understanding relationships between dependent and independent (explanatory) variables), and
-Optimization modeling (and its use in determining the best solution given a set of constraint).

Various general skills:
-Sampling techniques and issues
-Probability, conditional probability, expected value, and time value of money,
-Probability distributions and descriptive statistics


...nothing seems to fit ...how would I solve this?

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