Business Statistics

194 Business Statistics

This result indicates that sales of 0, 1, 2, 3, 4 cars is possible on any one day, but Alpha Motors

can expect to sell an average of 1.9 cars (approximately two) per day. This expected value can be used

to anticipate (forecast) monthly production of (1.9  30), that is, 57 cars or yearly production of (1.9

 365), that is, approximately 693 cars.

6.3.3  Variance

The expected value provides the mean value of the random variable. A measure of dispersion (vari-

ance and standard deviation) can also be obtained by using this mean of the random variable. The

computation of variance is discussed below.

6.3.3.1  Variance of a ...