When a customer places an order with Rudy's On-Line Office Supplies, a computerized accounting information system (AIS) automatically checks to see if the customer has exceeded his or her credit limit. Past records indicate that the probability of customers exceeding their
credit limit is 0.05. Suppose that, on a given day, 20 customers place orders. Assume that the number of customers that the AIS detects as having exceeded their credit limit is
distributed as a binomial random variable.
a. What are the mean and standard deviation of the number of customers exceeding their credit limits?
b. What is the probability that zero customers will exceed their limits?
c. What is the probability that one customer will exceed his or her limit?
d. What is the probability that two or more customers will exceed their limits?