What is the mean and standard deviation for first-year demand in Sanotronics LLC?

• A. Mean = 10,000 units, standard deviation = 3,000 units
• B. Mean = 15,000 units, standard deviation = 4,500 units
• C. Mean = 12,500 units, standard deviation = 2,000 units
• D. Mean = 20,000 units, standard deviation = 5,000 units

Answer: (B)

The key idea is to describe demand with its central tendency and its variability, which you use to generate realistic Monte Carlo scenarios. The mean is the average first-year demand you expect, while the standard deviation shows how much demand can swing around that average.

In this case, the data indicate an average first-year demand of 15,000 units, with variability around that level captured by a standard deviation of 4,500 units. Using these parameters in a distribution (for example, a normal model) means your simulated demand will center near 15,000 and typically fall within a range of about 4,500 units on either side, reflecting the observed dispersion.

Other options imply different expected levels or different spread, which would not align with the actual demand pattern and would distort your simulated outcomes.