Question: One of the retail industry s biggest frustrations is customers who abuse the return and exchange policies (S. Kang, New Return Policy: Retailers Say No to Serial Exchangers, The Wall Street Journal, November 29, 2004, pp. B1, B3). In a recent year, returns were 13% of sales in department stores. Consider a sample of 20 customers who make a purchase at a department store. Use the binomial model to answer the following questions:
a. What is the expected value, or mean, of the binomial distribution?
b. What is the standard deviation of the binomial distribution?
c. What is the probability that none of the 20 customers will make a return?
d. What is the probability that no more than 2 of the customers will make a return?
e. What is the probability that 3 or more of the customers will make a return?