New Process Inc., a large mail-order supplier of women’s fashions, advertises sa
ID: 3130125 • Letter: N
Question
New Process Inc., a large mail-order supplier of women’s fashions, advertises same-day service on every order. Recently, the movement of orders has not gone as planned, and there were a large number of complaints. Bud Owens, director of customer service, has completely redone the method of order handling. The goal is to have fewer than 3 unfilled orders on hand at the end of 95% of the working days. Frequent checks of the unfilled orders at the end of the day reveal that the distribution of unfilled orders follows a Poisson distribution with a mean of 2 orders. Has New Process, Inc. lived up to its internal goal? Mr. Owens wants some evidence to support your answer. Do the calculations in Excel and include the text for an e-mail to Mr. Owens providing your answer and explaining the evidence.
Show excel steps please
Explanation / Answer
New Process Inc., a large mail-order supplier of women’s fashions, advertises same-day service on every order. Recently, the movement of orders has not gone as planned, and there were a large number of complaints. Bud Owens, director of customer service, has completely redone the method of order handling. The goal is to have fewer than 3 unfilled orders on hand at the end of 95% of the working days. Frequent checks of the unfilled orders at the end of the day reveal that the distribution of unfilled orders follows a Poisson distribution with a mean of 2 orders. Has New Process, Inc. lived up to its internal goal? Mr. Owens wants some evidence to support your answer. Do the calculations in Excel and include the text for an e-mail to Mr. Owens providing your answer and explaining the evidence.
The probability that the store has fewer than 3 unfilled orders is:
=2
P( x=0) , excel function =POISSON.DIST(0,2,TRUE)
P( x=1) , excel function =POISSON.DIST(1,2,TRUE)
P( x=2) , excel function =POISSON.DIST(2,2,TRUE)
POISSON.DIST Probabilities Table
X
P(X)
0
0.1353
1
0.2707
2
0.2707
P( x<3) = P( x=0)+P( x=1)+P( x=2)
= 0.6767
On average, the supplier can expect to have fewer than three unfilled orders on 67.67% of the working days. This is less than the 95% goal . The New Process, Inc. not lived up to its internal goal.
POISSON.DIST Probabilities Table
X
P(X)
0
0.1353
1
0.2707
2
0.2707