CHAP 6

6.26 J.D. Power and Associates says that 60 percent of car buyers now use the Internet for research an
d price comparisons.
(a) Find the probability that in a sample of 8 car buyers, all 8 will use the Internet;
(b) at least 5;
(c) more than 4.
(d) Find the mean and standard deviation of the probability distribution.
(e) Sketch the PDF (using Excel or Appendix A) and describe its appearance (e.g., skewness). (Data a
re from J. Paul Peter and Jerry C. Olson, Consumer Behavior and Marketing Strategy, 7th ed. [McGra
w-Hill/Irwin, 2005], p. 188.)

X: number of car buyers using the internet

P(buy car & use Internet) = π = 0.6
P (buy car & not use Internet) = 1 - π = 0.4

a) n = 8, x = 8
8!
P(x = 8) = × 0.68 ×0.4 (8−8 )=0.0168
8 ! ×( 8−8)!

8! 5 (8−5)
b) P(x=5) = × 0.6 × 0.4 =0.2787
5!×(8−5)!
8! 6 (8 −6 )
P(x=6) = ×0.6 × 0.4 =0.2090
6 ! ×( 8−6)!
8!
P(x=7) = × 0.67 ×0.4 (8−7 )=0.0896
7 ! ×( 8−7)!
=> P (x ≥ 5) = P(x = 5) + P(x = 6) + P(x = 7) + P(x = 8)
= 0.2787 + 0.2090 + 0.0896 + 0.0168 = 0.5941
c) P(x > 4) = P(x ≥ 5) = 0.5941
d) Mean = n × π = 8 × 0.6 = 4.8
Standard deviation = σ =√ n × π (1−π ) = √ 8 ×0.6 (1−0.6) = 1.3856
e) Sketch a PDF:
6.39 The average number of items (such as a drink or dessert) ordered by a Noodles & Company cust
omer in addition to the meal is 1.4. These items are called add-ons. Define X to be the number of add-
ons ordered by a randomly selected customer.
(a) Justify the use of the Poisson model.
(b) What is the probability that a randomly selected customer orders at least 2 add-ons?
(c) No add-ons?
(d) Construct the probability distribution using Excel or Appendix B, make a graph of its PDF, and de
scribe its shape.

According to the information provided, the average number of things ordered in addition to the meal i
s 1.4. Add-ons are the term for these goods. In the other words, the mean number of add-ons ordered b
y a customer is 1.4.

a) In this case, there may be an endless number of orders in a set amount of time. The ordering a
ppears at random and are independent of each other. Thus, the number of add-ons (X) is appli
ed as a Poisson distribution with a mean of 1.4.
X = the number of add-ons ordered by a randomly selected customer.
=> X ∼ Pois (1.4)
−1.4 0
e❑ × 1.4❑
b) P(x=0) = =0.2466
0!
−1.4 1
e ×1.4 ❑
P(x=1) = =¿ 0.3452
1!
=> P(x ≥ 2) = 1 - P(x ≤ 1) = 1 - P(x=0) - P(x=1) = 1 - 0.2466 - 0.3452 = 0.4082
 −1.4 0
e❑ × 1.4❑
c) P(x=0) = =0.2466
0!
d) Sketch PDF

6.77 A small feeder airline knows that the probability is.10 that a reservation holder will not show up
for its daily 7:15 a.m. flight into a hub airport. The flight carries 10 passengers.
(a) If the flight is fully booked, what is the probability that all those with reservations will show up?
(b) If the airline overbooks by selling 11 seats, what is the probability that no one will have to be bum
ped?
(c) That more than one passenger will be bumped?
*(d) The airline wants to overbook the flight by enough seats to ensure a 95 percent chance that the fli
ght will be full, even if some passengers may be bumped. How many seats would it sell?
(a) X= Number of passengers show up
X~binom(n,π), P(not show) = π = 0.10 → P(show) = 0.90

10 ! 0 10−0
Fully booked → n=10, P(X=10)= 0.1 (1−0.1) = 0.3486
10! (10−10) !
(b) n=11
X~binom(n=11, π = 0.90)
P(X≤10) = 1 - P(X=11)

(c) The airplane has 10 seats, but it overbooks by selling 11 of them. Therefore, only the 11th passen
ger showing up will be bumped. Thus, there will be no more than 1 customer be bumped since there a
re only maximum 11 booked seats

(d) Let X~number of passengers show up , P(show up) = 1 - π = 1 - 0.10 = 0.90

n ~seats should it sell
P(X≥10 |n) = 0.95 = 1 - P(X≤9 |n) → P(X≤9 |n) = 0.05

n P(X≥10|n) Formulation

11 0.7 P(X=10|11) + P(X=11|11)

12 0.89 P(X=10|12) + P(X=11|12) + P(X=12|12)

13 0.966 P(X=10|13) + P(X=11|13) + P(X=12|13) + P(X=13|13)

When n=13, P(X≥10 |13) = 0.966 ≥ 0.95 → they should sell 13 seats

CHAP 7
7.37 The weights of newborn babies in Foxboro Hospital are normally distributed with a mean of 6.9
pounds and a standard deviation of 1.2 pounds.
(a) How unusual is a baby weighing 8.0 pounds or more?
(b) What would be the 90th percentile for birth weight?
(c) Within what range would the middle 95 percent of birth weights lie?

X: weight of newborn babies in Foxboro Hospital

μ x = 6.9
σ x = 1.2
a)
8−μ x 8−6.9
P(X ≥ 8) = P(Z ≥ ) = P(Z ≥ ) = P(Z ≥ 0.917) = 1- P(Z < 0.917)
σx 1.2
= 1 - F(0.917) = 1 - 0.8212 = 0.1788
⇒ The percentage of having a newborn babies weight 8.0 pounds or more in Foxboro Hospital is 0.17
88
b)
P(Z ≤ z) = 0.9
⇒ z = 1.28
⇒ P(Z ≤ 1.28) = 0.9
⇒ P(X ≤ (1.28× σ x + μ x) ) = 0.9
⇒ P(X ≤ (1.28×1.2+6.9) ) = 0.9
⇒ P( X ≤ 8.436) = 0.9
→ 90th percentile of the birth weight in Foxboro Hospital is ≤ 8.436 pounds.
c)
P(a<X<b) = 0.95
a−μ x b−μ x
=> P( <Z< ) = 0.95 = 0.975 - 0.025
σx σx
b−μ x b−μ x
● ⇒ F( ) = 0.975 ⇒ = 1.96
σx σx
⇒ b = 1.96× σ x + μ x = 1.96×1.2+6.9 = 9.252
a−μ x a−μ x
● ⇒ F( ) = 0.975 ⇒ = -1.96
σx σx
⇒ a = -1.96× σ x + μ x = -1.96×1.2+6.9 = 4.548
⇒ P (4.548 <X< 9.252 ) = 0.95
⇒ Within 4.548 and 9.252 pounds, 95 percent of birth weights lie.
7.60 A passenger metal detector at Chicago’s Midway Airport gives an alarm 0.5 times a minute.
(a) Find the median waiting time until the next alarm.
(b) Find the first quartile of waiting time before the next alarm.
(c) Find the 30th percentile waiting time until the next alarm. Show all calculations clearly

λ = 0.5
a. P(T ≤ t) = 1- e− λt = 0.5 ⇒ t = 1.386 minutes
b. P(T ≤ t) = 1- e− λt = 0.25 ⇒ t = 0.575 minutes
c. P(T ≤ t) = 1- e− λt = 0.3 ⇒ t = 0.713 minutes

CHAP 8

8.4 Concerns about climate change and CO2 reduction have initiated the commercial production of bl
ends of biodiesel (e.g., from renewable sources) and petrodiesel (from fossil fuel). Random samples o
f 35 blended fuels are tested in a lab to ascertain the bio/total carbon ratio.
(a) If the true mean is 0.9480 with a standard deviation of 0.0060, within what interval will 95 percent
of the sample means fall?
(b) What is the sampling distribution of X ? In other words, state the shape, center, and variability of t
he distribution of X .
(c) What theorem did you use to answer part (b)?

2
σ
n = 35, μ x = 0.9480, σ = 0.0060 ⇒ X ∼ N ( μ x , ) = N (0.9480, 1.029 ×10−6)
n
a) P (a < X < b) = 0.95

√
2
σ + μ = 1.96 x
● P (Z < z) = 0.975 ⇒ z = 1,96 ⇒ a = z ×
n
x √ 1.029× 10−6 + 0.9480 = 0.9500

√
2
σ + μ = -1.96 x
● P (Z < z) = 0.025 ⇒ z = -1,96 ⇒ b = -z ×
n
x √ 1.029× 10−6 + 0.9480 = 0.94
60

Therefore, the confidence interval is (0.9460; 0.9500)

b) The sampling distribution of X is normally distributed. Its center is 0.948, with a spread of 0.
004 (0.9500 – 0.9460 = 0.004).
c) Central Limit Theorem
8.16 Guest ages at a Vail Resorts ski mountain typically have a right-skewed distribution. Assume the
standard deviation (σ) of age is 14.5 years.
(a) Even though the population distribution of age is right skewed, what will be the shape of the distri
bution of X , the average age, in a random sample of 40 guests?
(b) From a random sample of 40 guests, the sample mean is 36.4 years. Calculate a 99 percent confide
nce interval for μ, the true mean age of Vail Resorts ski mountain guests.
(a) According to Central Limit Theorem, since the sample size is 40 (satisfied that n≥30), then th
e sampling distribution of is nearly normal
❑ ❑
(b) X = 36.4 , n = 40 , σ = 14.5 = 210.25
σx σx
P(-2.58 + X ≤ μ x ≤ 2.58 + X)
√n √n
σx σx 14.5 14.5
99%CI = ( X - 2.58 , X + 2.58 ) = (36.4 - 2.58 , 36.4 + 2.58 ) = (30.48, 42.3
√n √n √ 40 √ 40
2)
→ We are 99% confident that the true mean age of Vail Resorts ski mountain guests is betwe
en 30.48 and 42.32.

8.23 A sample of 21 minivan electrical warranty repairs for “loose, not attached” wires (one of several
electrical failure categories the dealership mechanic can select) showed a mean repair cost of $45.66
with a standard deviation of $27.79.
(a) Construct a 95 percent confidence interval for the true mean repair cost.
(b) How could the confidence interval be made narrower? (Data are from a project by MBA student T
im Polulak.)
❑
(a) X = 45.66 , n = 21 , s x = 27.79
sx sx
P(-2.086 + X ≤ μ x ≤ 2.086 + X)
√n √n
sx sx 27.79 27.79
95%CI= ( X - 2.086 , X + 2.086 ) = (45.66 - 2.086 , 45.66 + 2.086 ) = (3
√n √n √ 21 √ 21
3.01, 58.31)
→ We are 95% confident that the true mean repair cost is between 33.01 and 58.31.
(b) - Increase sample size (n)
- Decrease standard deviation (σ )
- Decrease confidence level (α)
CHAP 9

9.18 The mean potassium content of a popular sports drink is listed as 140 mg in a 32-oz bottle. Analy
sis of 20 bottles indicates a sample mean of 139.4 mg.
(a) Write the hypotheses for a two-tailed test of the claimed potassium content.
(b) Assuming a known standard deviation of 2.00 mg, calculate the z test statistic to test the manufact
urer’s claim.
(c) At the 10 percent level of significance (α = .10), does the sample contradict the manufacturer’s clai
m?
(d) Find the p-value.

X: potassium content of a popular sports drink (mg)

a = 140 (mg)
n = 20 (bottles)
X = 139.4 (mg)
This is a two-side tailed test
a)
Null hypothesis: H 0: μ x= a = 140 (mg)
Alternative hypothesis: H 1: μ x≠ a = 140 (mg)
b)
σ x = 2 (mg)
X−a 139.4−140
zX = σx = 2 = -1.342
√n √20
c)
α = 0.1
⇒ c 0.95 = 1.645 (CDF table for standard normal distribution)

1.342 = |z X| < c 0.95 = 1.645

⇒ do not reject H 0at 10% level ⇒ the sample does not contradict the manufacturer’s claim
d)
P (z < - |z X|) = P (z < -1.342) = F(-1.342) = 1 - F(1.342) = 1 - 0.911= 0.089
p-value = 2 × P (z < -1.342) = 2 × 0.089 = 0.178
9.39 According to J.D. Power & Associates, the mean purchase price of a smartphone device (such as
an iPhone or Blackberry) in 2008 was $216. In 2009, a random sample of 20 business managers who
owned a smartphone device showed a mean purchase price of $209 with a sample standard deviation
of $13.
(a) At α = 0.05, has the mean purchase price decreased? State the hypotheses and
decision rule clearly.
(b) Use Excel to find the p-value and interpret it.

X: Price of smartphone device ($)

a = 216 ($)
n = 20 (smartphones)
X = 209 ($)
S x = 13 ($)
This is a one-side tailed test
a)
α = 0.05
Null hypothesis: H 0 : μ x= a = 216 ($)
Alternative hypothesis: H 1: μ x< a = 216 ($)
α = 0.05 ⇒ c 0.05 = -1.729 (CDF table for t distribution, degree of freedom = n – 1 = 19)
X−a 209−216
t X = Sx = 13 = -2.408
√n √20
-2.408 = t X < c 0.05 = -1.729
⇒ Reject H 0 at 5% level ⇒ the mean purchase price decrease
b)
p-value is calculated by using this Excel formula:
= tdist(x; deg_freedom; tails)
⇒ = tdist(2.49,19,1) = 0.013126