Management Science - Chapter 7 - Test Reveiwer

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The Ambell Company uses batteries from two different manufacturers.

Historically, 60% of the


batteries are from manufacturer 1, and 90% of these batteries last for over 40 hours. Only 75% of the
batteries from manufacturer 2 last for over 40 hours. A battery in a critical tool fails at 32 hours. Using
Baye's Theorem, What is the probability it was from manufacturer 2? (use 3 decimal places) *

(.4*.25)/(.6*.1+.4*.25) = 0.625 = 62.5%

___________

as a general rule, P(A or B) = P(A) + P(B)

for any battery, it was either from manufacturer 1 (m1) or manufacturer 2 (m2)

so probability that any battery lasts less than 40 hours is:

P(< 40 hours) = P(m1 and < 40 hours) + P(m2 and < 40 hours)

= 60/100 * (1 - 90/100) + 40/100 * (1 - 75/100)

= 16/100

as a general rule, P(A given B) = P(A and B) / P(B)

so probability it was from manufacturer 2 is:

P(m2 given < 40 hours) = P(m2 and < 40 hours) / P(< 40 hours)

= (40/100 * (1 - 75/100)) / (16/100)

= (10/100) / (16/100)

= 5/8

= 62.5%

______________________________________________________________________________

It is estimated that 3% of the athletes competing in a large tournament are users of an illegal drug to
enhance performance. The test for this drug is 90% accurate. Using Baye's, Theorem, what is the
probability that an athlete who tests positive is actually a user? (use 4 decimal places only)

This is an exercise in conditional probability. You can use Bayes' Rule to solve this. However, I find that
it is much easier to just use the definition of conditional probability. In short I derived Bayes' Rule every
time I do this but it prevents me from making errors in more complex problems.

This is an exercise in conditional probability. For any two events A and B, where P(B) ≠ 0, you have the
conditional probability:

P( A | B ) = P( A ∩ B ) / P( B ) = P( B | A) * P(A) / P(B)
the above is read as: the probability of A given B is equal to the probability of A and B divided by the
probability of B.

Let D be the event the athlete used drugs

Let ~D be the event the athlete does not use drugs

Let + be a positive test

Let - be a negative test

We know

P(D) = 0.03

P(~D) = 0.97

P( + | D ) = 0.90

P( - | D) = 0.10

P( - | ~D ) = 0.90

P( + | ~D) = 0.10

Find P( D | +)

= P( + | D ) * P(D) / P(+)

Use The Law of Total Probability to find P(+)

For a set of events A1, A2, A3, ... , An where the Ai's are mutually exclusive and exhaustive events and
for any other event B

P(B)

= P(B and A1) + P(B and A2) + ... + P(B and An)

= P(B | A1) * P(A1) + P(B | A2) * P(A2) + ... + P(B | An) * P(An)

P(+) = P( + | D) * P(D) + P( + | ~D ) * P(~D)

P(+) = 0.90 * 0.03 + 0.10 * 0.97

P(+) = 0.124

P( D | + )

= 0.90 * 0.03 / 0.124


= 0.2177419

If a player tests positive, there is only a 21.7% probability they have used drugs.

____________

drug users testing positive: 0.03*0.90 = 0.027

non users testing positive: 0.97*0.10 = 0.097

total testing positive 0.124.

proportion of users out of all positive tests:0.027/0.124 = 0.2177

probability that an athlete who tests positive is actually a user = 0.22 to 2 significant figures.

The normal distribution (the bell-shaped curve) has a skewness of one.

False; skewness = 0

P(A) = 1 - P(Ac)

True

A conditional probability equals a marginal probability divided by a joint probability.

False; Conditional = Joint/Marginal

The interquartile range (IQR) equals the difference between the mean and the mode.

False; Difference b/w 1st and 3rd quartiles


The mean equals the expected value, which is the location with equal probability of lower and higher
values.

True

A probability tree can be used to determine the joint probabilities of an experiment.

True

Determining the number of heads from the tossing of a coin is an example of a Binomial experiment.

True

A marginal probability is an example of a posterior probability.

False; Marginal probability is the probability of an event

The Microsoft Excel function PETERSON will return the correlation coefficient between two datasets.

False; PETERSON not an Excel function

Increasing the number of trials will increase the variance in a Binomial experiment.

True

A variable can have multiple measures.

True

The area in the standard normal distribution within 0.93 standard deviations of the mean is equal to
0.64762 of the cumulative area.

True
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If the covariance between two variables is zero the two variables are not related.

False; there may be a nonlinear relationship

If the marginal probability of event A is 0.5 and the joint probability of event A and event B occurring is
0.25, then the conditional probability of event B given event A is equal to 2.0

False; =.5

The combination of 6 items selected 2 at a time will result in 10 experimental outcomes.

False; =15

Actual product weights is an example of a discrete random variable.

False; Weights can vary thus continuous

If exam grades are negatively skewed, there will be more high grades than low grades.

True

You can add, but not multiply categorical data scales.

False

If the probability of the complement of an event equals 0.25, the probability of the event equals 0.75.

True
An experiment where all outcomes are equally likely will result in a uniform distribution.

True

A symmetric distribution will have a skewness of zero.

True

A correlation coefficient between two variables equal to -0.9 means that the two variables do not have a
linear relationship.

False; -.9 Represents strong negative linear relationship b/w 2 variables

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Exams in this class can be framed as Binomial experiments.

True

The marginal probability of an event equals the probability of the event.

True

The sample mean is an unbiased estimate of the population mean

True

=PERCENTILE.INC(a,b)

When determining the 20th percentile with the above Microsoft Excel function, the value of "b" will
equal "0.20."

True
A discrete probability function can not have negative values.

True

The sum of the probabilities at each step in a probability tree equal 1.0.

True

A conditional probability is an example of a posterior probability.

True

If an event has five (5) possible outcomes that are equally likely, the probability of each outcome is 0.25.

False

The permutation of 8 items selected 4 at a time will result in 120 experimental outcomes.

False

P(A) = 1 + P(A ∪ Ac)

False

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Numerical values can be applied to categorical data.

True
Z-values of -3.0 and 3.0 are equidistant from the mean of the standard normal distribution.

True

P(A|B) can be read as "the probability of A, given B."

True

A Bernoulli trial can have four potential outcomes.

False; 2 outcomes

The Microsoft Excel function PEARSON will return the correlation coefficient between two datasets.

True

Gender (male, female) is an example of an nominal data scale.

True

The variance of a discrete variable must also be a discrete variable.

False

The Microsoft Excel function COVARIANCE.S will return the covariance between two samples.

True

A statistical inference can be incorrect.

True

The mean and the mode will always occur at the same location.
False

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The value 1,516,904,279,801 can be a measure of a discrete variable.

True

In a Binomial experiment the probabilities cannot change from trial to trial.

False; Values of p and 1-p do not change

The student with the highest grade in this class will be ranked in the 100th percentile for this class.

True

If the union of two events equals the sum of the outcomes for each of the two events, the intersection
of the two events is empty.

True

The cumulative area under the standard normal curve up to a z-value of -1.62 equals approximately
5.3% of the cumulative area.

True

If the probability of the complement of an event equals 0.40, the probability of the event also equals
0.40.

False; Probability =.6

In a Binomial experiment, each trial depends on all prior trials.


False; Each trial indep.

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