Given a distribution of costs per customer, with a fixed revenue per customer, how would I work out what the profit would be on:

  • mean cost: $\$3.00$

  • standard deviation cost: $\$2.00$

  • revenue: $\$10$

  • customers: 10,000

Hint: Are the customers a number or the total revenue in dollars? The profit just depends upon the mean cost, not the standard deviation. Using your numbers, you average $\$7$ profit per customer. The standard deviation only comes in when you predict the profit next time from a batch of customers (and I bet the normal distribution is a terrible approximation)


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