# Expected Value and Standard Deviation

Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given below:

Possible Sales

Market Reaction in Units Probabilities

Low response . . . . . . . . . . . . . 20 .10

Moderate response . . . . . . . . . 40 30

High response . . . . . . . . . . . . . 55 .40

Very high response . . . . . . . . . 70 .20

a. What is the expected value of unit sales for the new product?

b. What is the standard deviation of unit sales?

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#### Solution Preview

Expected Value and Standard Deviation

Myers Business Systems is evaluating the introduction of a new product. The

possible levels of unit sales and the probabilities of their occurrence are given

below:

Possible Sales

Market Reaction in Units Probabilities

Low response . . . . . . ...

#### Solution Summary

This solution is comprised of a detailed explanation to calculate what is the expected value of unit sales for the new product and what is the standard deviation of unit sales.