Problem on standard deviation

Assignment Help Macroeconomics
Reference no: EM1362

Question:The airport branch of a car rental company maintains a fleet of 50 SUVs. The interarrival time between requests for an SUV is 2.4 hours, on average, with a standard deviation of 2.4 hours. There is no indication of a systematic arrival pattern over the course of a day. Assume that, if all SUVs are rented, customers are willing to wait until there is an SUV available. An SUV is rented, on average, for 3 days, with a standard deviation of 1 day.

a. What is the average number of SUVs parked in the company's lot?

 b. Through a marketing survey, the company has discovered that if it reduces its daily rental price of $80 by $25, the average demand would increase to 12 rental requests per day and the average rental duration will become 4 days. Assuming that the std. dev. values stay unchanged, should this company adopt this new pricing policy? Provide an analysis!

c. What is the average time a customer has to wait to rent an SUV? Please use the initial parameters rather than the information in (b).

d. How would the waiting time change if the company decides to limit all SUV rentals to exactly 4 days? Assume that if such a restriction is imposed, the average interarrival time will increase to 3 hours, with the standard deviation changing to 3 hours. 

Reference no: EM1362

Questions Cloud

Market imperfection associated with negative externalities : Essay on Market imperfection associated with negative externalities.
Citizen gas company case study : Please refer to Citizen Gas Company PDF for case study and questions. The case study belongs to Economics. Citizen Gas Company is a medium sized company with customers from residential, commercial and industrial sectors.
Problem on standard deviation : Problem on standard deviation
Market imperfection associated with negative externalities : Essay on Market imperfection associated with negative externalities
Market imperfection associated with negative externalities : An essay on Market imperfection associated with negative externalities.
Merger and acquisition of firms operating under cournot comp : The question is that if two firms in the Cornout market merge into one firm, what would the merger result in? how much of marginal cost would prevail in the market, etc are answered in a detailed in manner in the solution.
Firms operating under cournot competition or cournot market : The details about three identical firms operating in Cournot competition are given. The demand curve with marginal revenue, profit maximization, optimum quantity, total demand and market price related questions are answered.

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

  Market imperfection associated with negative externalities

Essay on Market imperfection associated with negative externalities

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Market imperfection associated with negative externalities

An essay on Market imperfection associated with negative externalities.

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd