Demand for rug-cleaning machines at Clyde’s U-Rent-It is shownin the following table. Machines are rented by the day only. Profiton the rug cleaners is $19 per day. Clyde has 3 rug-cleaningmachines.
| Demand | Frequency |
| 0 | .30 | |
| 1 | .20 | |
| 2 | .20 | |
| 3 | .15 | |
| 4 | .10 | |
| 5 | .05 | |
| 1.00 | |
|
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a. Assuming that Clyde’s stocking decision isoptimal, what is the implied range of excess cost per machine?(Enter smaller value in first box and larger value insecond box. Do not round intermediate calculations. Round youranswers to 2 decimal places. Omit the \"$\" sign in yourresponse.)
Implied range of excess cost per machine from $Â Â to$
b. Your answer from part a has been presented to Clyde,who protests that the amount is too low. Does this suggest anincrease or a decrease in the number of rug machines hestocks?
c. Suppose now that the $19 mentioned as profit isinstead the excess cost per day for each machine and that theshortage cost is unknown. Assuming that the optimal number ofmachines is 3, what is the implied range of shortage cost permachine? (Enter smaller value in first box and larger valuein second box. Do not round intermediate calculations. Round youranswers to 2 decimal places. Omit the \"$\" sign in yourresponse.)
Implied range of shortage cost per machine from $Â Â to$Â Â Â
