Business Statistics
Rationale
Assignment 2 is designed to:
? demonstrate mastery of the subject material covered in the text, the lectures and the
tutorials for the topics Probability, Probability Distributions, Sampling and Sampling
Distributions;
? detect difficulties with any concepts so the lecturer can provide feedback;
? assess learning objectives 1, 3, 5, 6 and 7.
? build a base for study in the later topics.
Question 1 (24 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working, including the relevant
formula;
? appropriate well labelled diagrams;
? a sentence which answers the questions asked.
a. If ( ) 0.06 P C D ? ? , P(C) = 0.4 and P(D) = 0.2,
i) find )  ( D C P .
(3 marks)
ii) find ) ( D C P ? .
(3 marks)
b. In a drawer there are 30 ribbons, 16 are blue and the rest are red. Two ribbons are
selected at random from the drawer, without replacement.
i) Draw a probability tree diagram to represent this problem. Label the end of
each branch with the simple events and include the probabilities along each
branch of the tree.
(3 marks)
ii) If two ribbons are drawn at random what is the probability of selecting a pair
of matching ribbons (two ribbons the same colour)?
(2 marks)
c. Given that Z is the standard normal random variable,
i) find ) 36 . 1 ( ? Z P (2 marks)
ii) find P( 1.2< Z< 2) (3 marks)
An appropriate, well labelled diagram must be included for each part.
d. The life time of the Tuff brand of tyres is approximately normally distributed, with a
mean of 63,000 km and a standard deviation of 3,000 km. The tyres carry a warranty
of 55,000 km.
i) What proportion of tyres will fail before the warranty expires?
An appropriate, well labelled diagram must be included
(4 marks)
ii) The Tuff company claims that at least 10% of the tyres last longer than 68,000
km.
Provide evidence to support or disprove this statement.
An appropriate, well labelled diagram must be included.
(4 marks)
Question 2 (14 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working, including the relevant
formula;
? a sentence which answers the questions asked.
a. On average 12 people every half hour check in at Counter A at the Qantas domestic
terminal at Terminal 2 at Sydney airport. The people arrive at the counter randomly
and independently.
i) Identify the type of probability distribution represented by this problem and
write down the value(s) of the parameter(s). (2 marks)
ii) Calculate the probability of more than 13 people checking in at Counter A in
the next half hour. (4 marks)
iii) Calculate the probability of exactly 5 people checking in at Counter A in the
next 15 minutes. (5 marks)
b. Let X be the number of cars a mechanic repairs on a given day. The distribution of X
follows.
No. cars X 2 3 4 5 6
Probability 0.10 0.15 0.35 0.23 0.17
Calculate the mean and standard deviation for this probability distribution .
(3 marks)
Question 3 (16 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working including the relevant
formula;
? the correct use of Excel where appropriate;
? a sentence which answers each question asked.
An office supply company conducted a survey before marketing a new paper shredder
designed for home use. In the survey, 75% of the people who used the shredder were satisfied
with it so the company decided to market it. Assume that 75% of all people who will use the
new shredder will be satisfied.
a. Find the probability that for a random sample of 20 customers who purchased the new
shredder, exactly 16 of these will be satisfied with it.
(4 marks)
b. Find the probability that for a random sample of 20 customers who purchased the new
shredder, less than 14 of these will be satisfied with it.
(4 marks)
c. Find the expected number of dissatisfied customers in a sample of 50 customers who
purchased the new shredder.
(2 marks)
d. Find the probability that for a random sample of 100 customers who purchased the
new shredder, exactly 75 of these will be satisfied with it.
(3 marks)
e. Find the probability that for a random sample of 150 customers who purchased the
new shredder, more than 95 will be satisfied with it.
(3 marks)
Hint: Use the appropriate statistical tables to determine the probabilities in parts a. and b.
and use the appropriate Excel statistical function to determine the probabilities in
parts d. and e. Include the Excel formula used (in d. and e.) when giving your answer.
Question 4 (11 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working including the relevant
formula;
? appropriate well labelled diagrams;
? a sentence which answers each question asked.
A Professor of statistics has noted from past experience that students who do all their
assignments and tutorial questions have a 98% chance of passing the final exam, and if they
don’t do any of the assignments and tutorial questions they have a 15% chance of passing the
final exam. The Professor estimates that 40% of the students do not do all their assignments
and tutorial questions.
a. Using letters of the alphabet and appropriate probability notation, define the two
simple events described in this problem and their complements (4 definitions
altogether)
(2 marks)
b. Draw a probability tree to represent the information given in the question using the
letters that you used to define the simple events in part a. Label the end of each branch
with the simple events and include the probabilities along each branch of the tree.
(3 marks)
c. What proportion of students fail the final exam?
(3 marks)
d. Given that a student failed the final exam, what is the probability this student did not
do all their assignments and tutorial questions?
(3marks)
Question 5 (7 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working including the relevant
formula;
? a sentence which answers each question asked.
a. A switch board operator receives an average of 25 calls every 15 minutes. Calls are
received randomly and independently. The switch board operator used the following
Excel command to determine a probability 1POISSON(20, 25, TRUE)
Describe in words or write down using probability notation what probability he
worked out in the context of this problem and then use Excel to evaluate it.
(3 marks)
b. An investment analyst collects data on shares. He notes whether dividends were paid
on the shares, and whether the shares increased in price over a given period. The data
collected is presented in the following table.
Price increase No price increase Total
Dividends paid 38 72 110
No dividends paid 85 55 140
Total 123 127 250
i) If a share is selected at random, what is the probability that it both increased in
price and paid dividends? (2 marks)
ii) Given that a share has increased in price, what is the probability that it also
paid dividends?
(2 marks)
Question 6 (15 marks)
Marking Criteria
Marks will be awarded for:
? the correct answers and appropriate detailed working including the relevant
formula and appropriate diagrams;
? appropriate well labelled diagrams;
? a sentence which answers each question asked.
a. The cost of rental for a twobedroom apartment in a particular suburb is normally
distributed with a mean of $2600 per month and a standard deviation of $450.
i) What is the probability that a randomly selected twobedroom apartment in this
suburb will cost less than $2300 per month?
(4 marks)
ii) If monthly rents for a random sample of 9 apartments in this suburb is selected,
what is the probability that the mean rent for this sample is greater than $2400?
(5 marks)
iii) Only 5% of apartments will cost more than $x per month. Find x.
(3 marks)
An appropriate, well labelled diagram must be included for each part.
b. A local radio station wants to survey the population in their listening area on a
particular issue. They ask people to call in and give their opinion regarding the issue.
From these calls the radio station draws a conclusion stating that the population in their
listening area has this belief.
Explain the pitfalls in this type of sampling.
(3 marks)
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