SFM – SAMPLE FINAL EXAM (Time allowed: 60 minutes)

Instruction: The paper includes 3 Parts. You have to answer correctly all 3 questions (Q1, Q2
and Q3) in Part A to get Pass (P4). You need to correctly answer 2 questions in Part B to get
Merit (M2). You need to correctly answer 2 questions in Part C to get Distinction (D2).
Part A (For P4)
Q1. Application of normal distribution in Inventory Problem:
Assuming the demand for a product A in a small shop is a random variable with average demand
of 150 kg a week and standard deviation of 25 kg.
Mean = 150
SD = 25
a) Applying normal distribution assumption, if the shop manager orders 190 kg a week,
what is the probability of stock out?
b) Applying normal distribution assumption, if the manager wants to reduce the possibility
of stock out to be 4%, what should be the order quantity for a week?
Note: You can also review the problem of Binomial Distribution
Q2. Quality Control problem
To see if there is the improvement of the quality of a new production line, the production
manager takes a sample of 140 products of the old one and finds that there are 12 defects. For the
new one, he takes another sample of 160 products and finds that there are 8 defects. Compare the
proportions of defective rates of two production lines to evaluate if any improvement has been
made. Use 5% significance level.
Confidence level = 95%
P ngang = số sai/tổng sample
P ngang 1 = 12/140 = 3/35
P ngang 2 = 8/160 = 1/20
Q3: Evaluation of business performance
A pizza shop set the target of daily sales be at least 20 mil dongs. To evaluate the performance of
shop over the last six months, the manager took randomly sales of 25 days of operation in the
last six months. He found that the mean sales of sample 25 days is 22.3 mil dongs and standard
deviation is 2.6 mil dongs. Using 5% significance level, conduct the hypothesis test to make sure
that the shop has achieved the target over the last six months.

Note: You can also review the problems of Estimation Confidence Interval for mean, for
proportion; test of hypothesis for mean, for proportion

Part B (For M3)

Application of probability distribution in Project choice

The returns (%) of Project A (variable X) and Project B (variable Y) with respective probabilities
are given in the tables below:

X -3 4 8 Y 1 3 6
Prob 0.20 0.50 0.30 Prob 0.30 0.30 0.40
Q1. Calculate expected returns and standard deviations for two projects
Q2. Use results above, make your evaluation and justification for selection of project in terms of:
return, risk and both of them
Note: You can also review the application of distribution table to find the distribution of a
function of X and Y (i.e Total Income, Total revenue…)
Part C (For D2):
Recommend the variability for quality control
Bridies’ Bearing Works manufactures bearing shafts whose diameters are normally distributed
with parameters µ = 1 cm, σ = 0.002 cm. The buyer’s specifications require these diameters to be
1.000 ± 0.003 cm.
Q1: What proportion of the manufacturer’s shafts are likely to be rejected?
Q2: Recommend what value of σ will ensure that no more than 1 percent (0.01) of her shafts are
likely to be rejected? How the manufacturer improves her quality control by adjusting the value
of σ?