Business Statistics – II

Assignment -1
Date of Submission: 11 Sep 20223

1. For a binomial distribution, is it true that the mean is the most likely value? Explain.
2. What assumptions must be met for a binomial distribution to be applied to a real life
situation?
3. For a binomial distribution the mean is 4 and variance is 2. Find the probability of
getting at least 2 successes.
4. A brokerage survey reports that 30 per cent of individual investors have used a
discount broker, i.e. one which does not charge the full commission. In a random
sample of 9 individuals, what is the probability that
a) Exactly two of the sampled individuals have used a discount broker?
b) Not more than three have used a discount broker
c) At least three of them have used a discount broker
5. A multiple-choice test contains 8 questions with 3 answers to each question (of
which only one is correct). A student answers each question by rolling a balanced
dice and checking the first answer if he gets 1 or 2, the second answer if he gets 3 or
4, and the third answer if he gets 5 or 6. To get a distinction, the student must secure
at least 75 per cent correct answers. If there is no negative marking, what is the
probability that the student secures a distinction?
6. Under what conditions is the Poisson distribution appropriate? How are its mean
and variance calculated?
7. Assume that on an average one telephone number out of 15 is busy. What is the
probability that if six randomly selected telephone numbers are called
a. Not more than three will be busy
b. At least three of them will be busy
8. On an average, one in 400 items is defective. If the items are packed in boxes of 100,
what is the probability that any given box of items will contain: (i) no defectives (ii)
less than two defectives (iii) one or more defectives and (iv) more than three
defectives.
9. One-fifth per cent of the blades produced by a blade manufacturing factory turn out
to be defective. The blades are supplied in packets of 10. Use Poisson distribution to
calculate the approximate number of packets containing no defective, one defective,
and two defective blades respectively in a consignment of 1,00,000 packets.
10. Normal distribution is symmetric with a single peak. Does this mean that all
symmetric distributions are normal? Explain.
11. When finding normal probability, is there a difference between values P(a < x < b)
and P(a ≤ x ≤ b), where a and b represent two numbers? Why or why not?
12. What are the parameters of normal distribution? What information is provided by
these parameters?
13. In a normal distribution 31 per cent of the items are under 45 and 8 per cent are
over 64. Find the mean and standard deviation of the distribution.
14. The income of a group of 10,000 persons was found to be normally distributed with
mean Rs. 1750 p.m. and standard deviation Rs. 50. Show that of this group 95 per
cent had income exceeding Rs. 1668 and only 5 per cent had income exceeding Rs.
1832. What was the lowest income among the richest 100?
15. Assume that the test scores from a college admissions test are normally distributed
with a mean of 450 and standard deviation of 100.
a) What percentage of people taking the test are between 400 and 500?
b) Suppose someone received a score of 630. What percentage of people taking the
test score better? What percentage score worse?
c) If a particular university will not admit any one scoring below 480, what
percentage of the person taking the test would be acceptable to the university?
16. In an intelligence test administered to 1000 students, the average score was 42 and
standard deviation 24. Find
a) The no of students exceeding a score of 50.
 b) The no of students lying between 30 and 54.
c) The value of the score exceeded by the top 100 students.
17. The mean inside diameter of a sample of 500 washers produced by a machine is 5.02
mm and the standard deviation is 0.05 mm. The purpose for which these washers
are intended allows a maximum tolerance in the diameter of 4.96 to 5.08 mm,
otherwise the washers are considered defective. Determine the percentage of
defective washers produced by the machine, assuming the diameters are normally
distributed.
18. Construct the 95 per cent confidence limit of the mean if n = 250, x̅ = 25, σ x̅ = 4
19. Describe the effect of sample size on the margin of sampling error of point estimate
of the proportion mean. Does this error depend on the sample size in the same way?
20. The following data have been collected for a sample from a normal population : 5,10,
8, 11, 12, 6, 15, 13
a. What is the point estimate of population mean and standard deviation?
b. What is the confidence interval for population mean at 95 per cent confidence
interval?
21. A shoe manufacturing company is producing 50,000 pairs of shoes daily. From a
sample of 500 pairs, 2 per cent are found to be of substandard quality. Estimate at
95 per cent level of confidence the number of pairs of shoes that are reasonably
expected to be spoiled in the daily production.
22. In an attempt to control the quality of output for a manufactured part, a sample of
parts is chosen randomly and examined in order to estimate the population
proportion of parts that are defective. The manufacturing process operated
continuously unless it must be stopped for inspection or adjustment. In the latest
sample of 90 parts, 15 defectives are found. Determine a point estimate and interval
estimate at 98 per cent confidence of population proportion defective.
23. In a survey carried out in a large city, 170 households out of a random sample of 250
owned at least one pet. Find the 95 per cent confidence interval for the percentage of
households in the city who own at least one pet. Does the result support a pet food
manufacturer’s claim that 75 per cent of all households have at least one pet?
24. A person wants to buy a machine component in large quantity from a company. The
company’s sales manager is requested to provide data for the mean life of the
component. The manager considers it worth ₹800 to obtain an estimate that has 19
chances in 20 being within 0.05 of the correct value. The cost of setting up
equipment to test the component is ₹500 and the cost of testing the component is
₹2.50. It is known from the past records that the standard deviation of the life of the
component is 0.80. Will the manager be able to obtain the required estimate? What
is the minimum cost of obtaining the necessary estimate?
25. For a particular consumer product, the sales per retail outlet last year in a sample of
n1 = 10 stores, was x̅ 1 = ₹3,425 with s1 = ₹ 200. For a second product, the mean sales
per outlet in a sample of n2 = 12 stores, was x̅ 2 = ₹3,250 with s2 = ₹175. The sales per
outlet is normally distributed. Estimate the difference between the mean level of
sales per outlet last year using 95 per cent confidence level. If the sample size of the
samples n1 = 20 and n2 = 24, what would be the difference in the means be?
26. A manufacturer of a synthetic fibre takes periodic samples to estimate the mean
breaking strength of the fibre. For each periodic sample, an experiment is devised in
which the breaking strengths (in kg) are observed for 16 randomly selected samples
from the production process. The strengths of current samples are: 20.8, 20.6, 21.0,
20.9, 19.9, 20.2, 19.8, 19.6, 20.9, 21.1, 20.4, 19.7, 19.6, 20.3, 16.6 and 20.7. Determine
95 per cent confidence interval for the average breaking strength of the fibre,
assuming that breaking strength is adequately approximated by normal distribution.
27. A packaging device is set to fill the detergent powder packets with mean weight of
5.2 kg, with a standard deviation of 0.21 kg. The weight of packets can be assumed to
be normally distributed. The weight of packets is known to drift upwards over a
period of time due to machine fault, which is not tolerable. A random sample of 100
packets is taken and weighed. The sample has a mean weight of 5.03 kg. Can we
conclude that the mean weight produced by the machine has increased? Use 5 per
cent level of significance.
28. A firm believes that the tyres produced by the process A on an average last longer
than the tyres produced by the process B. to test the belief , random samples of tyres
the tyres produced by the two processes were tested and the results are:
Process Sample Size Average Lifetime (in Standard Deviation
km) (in km)
A 50 22,400 1000
B 50 21,800 1000
Is there evidence at a 5per cent level of significance that the firm is correct in its
belief?
29. A company is considering two different television advertisements for promotion of a
new product. Management believes that advertisement A is more effective than
advertisement B. two test market areas with virtually identical consumer
characteristics are selected: advertisement A is used in one area and advertisement
B in the other area. In a random sample of 60 customers who saw advertisement A,
18 had hired the product. In the random sample of 100 customers who saw
advertisement B, 22 had hired the product. Does this indicate that advertisement A
is more effective than advertisement B, if 5per cent level of significance is used?
30. The HRD manager wishes to see if there has been any change in the ability of
trainees after a specific training programme. The trainees take an aptitude test
before the start of the programme and an equivalent one after they have completed
it. The score recorded are given below. Has any change taken place?
Trainee A B C D E F G H I
Score before the training 75 70 46 68 68 43 55 68 77
Score after the training 70 77 57 60 79 64 55 77 76