Which of the following methodologies should Oliver use?

Oliver is a procurement manager and he is trying to work out the likelihood that a supplier fails to deliver to the warehouse two days in a row.

Which of the following methodologies should Oliver use?
A . value at risk
B. normal distribution
C. binomial distribution
D. Poisson Distribution

View Answer

Answer: D

Explanation:

Poisson Distribution would be used for this. Poisson Distribution predicts the likelihood of an event occurring. This is explained on p. 129 of the study guide but this YouTube video explains it a lot better: https://www.youtube.com/watch?v=zA7fp2s7FlM