Question

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends more than a certain amount per visit at this supermarket. The expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $85 and a standard deviation of $20. If the management wants to give free gifts to at most 10.56% of the customers, what should the amount be above which a customer would receive a free gift?

Round your answer to two decimal places.

A customer should spend at least $___to receive a free gift.

Answer 1

The amount be above which a customer would receive a free gift is 110.

What is standard deviation?

A standard deviation (or σ) is a measure of how dispersed the data is in relation to the mean.

μ₀ = 85

σ  =  20

z (score) = 1.25

Now,

 z = ( X - μ₀ )/σ

1.25 = ( X - 85 ) / 20

25 + 85  = X

X = 110

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