Question

The ABC Cement Corporation produces a high quality cement that is supplied to construction companies. The potential demand and the probability of each potential demand quantity are given for the upcoming year.

Demand in tonsProbability
500,0000.3
250,0000.4
300,0000.3

Assuming manufacturing capacity of 700,000 tons, the estimated capacity cushion is:
A. 340,000 tons
B. 360,000 tons
C. >1,000,000 tons
D. It cannot be computed from this information

Answer

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