Subject Expert QA – 1 - (2015- 16) Module - 2

MODULE - 2

Q – 1 The expenditure on breakfast of customers of a restaurant follow normal distribution with mean
Rs. 200 and S.D. Rs. 50. On a particular day 40 customers spent more than Rs. 275, find the
expected number of customers visited the restaurant on that day. 4 - [S – 10]

Q – 2 The lives of a certain brand of batteries are known to be normally distributed with mean 415
hours and SD 20 hours. A random sample of 100 batteries were selected, what is the probability
that the batteries will have a mean life of at least 412 hours? If sample size is reduced to 50, what
happens to the above probability? [W – 13 - N]

Q – 3 Mr. Tejas Shah is the supervisor for the Narmada Dam. Mr. Shah knows that the dam’s turbines
generate electricity at the peak rate only when at least 10,00,000 gallons of water pass through
the dam each day. He also knows, from past experience, that the daily flow is normally distributed,
with the mean equal to 8,50,000 gallons and standard deviation of 2,00,000 gallons. What is the
probability that the turbines will generate at peak rate today? [S – 11 – E] & 5 - [W – 12 –N]

Q – 4 The average stock price for companies making S&P500 is $30, and the standard deviation is $8.2.
Assume that the stock prices are normally distributed:
a. What is the probability a company will have a stock price no higher than $20?
b. How high does a stock price to be put to a company in the top 10%? [W – 12]

Q – 5 Assume that the daily demand for unleaded gasoline at a service station is normally distributed
with a mean of 25000 gallons and a standard deviation of 5000 gallons. [W – 10] & [S – 15 – N]
a. What are the chances that daily demand will exceed 30000 gallons?
b. What are the chances that the daily demand will be less than 15000 gallons?
c. Between what two amounts would you expect 95% of the daily demands to lie?

Q – 6 Suppose the average speeds of passenger a train traveling from Mumbai to Delhi is normally
distributed, with a mean average speed of 88 miles per hour and standard deviation of 6.4 miles
per hour. [W – 14]
(a) What is the probability that a train will average less than 70 mile per hour?
(b) What is the probability that a train will average more than 80 mile per hour?
(c) What is the probability that a train will average between 90 and 100 mile per hour?

Q – 7 According to Cellular Telecommunication Industry Association, the average local monthly cell
phone bill is $42.78. Suppose local monthly cell phone bills are normally distributed, with a
standard deviation of $11.35. [W – 11 – N] & [S – 15]
(i)What is the probability that a randomly selected cell phone bill is more than $67.75.
(ii)What is the probability that a randomly selected cell phone bill is between $30 and $50.
(iii)What is the probability that a randomly selected cell phone bill is not more than $25.

Q – 8 According to the research, average monthly household phone bill is $ 22. Household phone bills
are normally distributed with standard deviation of $ 4.
a. What is the probability that a randomly selected monthly phone bill is more than $ 17?
b. What is the probability that a randomly selected monthly phone bill is less than $ 13?
c. What is the probability that a randomly selected monthly phone bill is between $ 25 and
$ 31? [W - 13]

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 9 WealthKare Ltd. has designed the training program to upgrade the supervisory skills of
supervisors. Because the program is self administered, the supervisors require different numbers
of hours to complete the program. A study of past participants indicates that the mean length (μ)
of time spent on the program is 500 hours and that this normally distributed, random variable has
a standard deviation of 100 hours. By using the knowledge of normal distribution determine
probability that a participant selected at random will require training [S – 13 – N]
(1) Between 500 to 650 hours (2) More than 700 hours (3) Less than 580 hours

Q – 10 In preparation of an international sports event, the civic authorities in a city install 6000 electric
lamps on the roads. These lamps have normally distributed burning life with an average of 1200
hours with a standard deviation of 150 hours.
1) What is the number of lamps that might be expected to fail in the first 900 burning hours?
2) What is the number of lamps that might be expected to have life between 1000 and 1400hours?
3) What is the number of lamps that might be expected to have life more than 1400 hours?
4) After how many hours would you expect that 10% of the lamps would fail? [W – 13 - N]

Q – 11 A multinational bank issuing Master Card is monitoring the use of credit card account holders in
the context of their spending habits. A market survey shows that the average monthly spending of
its regular card users is normally distributed with mean Rs.2800 and standard deviation Rs.900.
The customers are classified into four categories according to pattern of spending:
a) Category 1 spends less than Rs.2000 d) Category 4 spends Rs.4000 or more
b) Category 2 spends Rs.2000 or more but less that Rs.3000
c) Category 3 spends Rs.3000 or more but less than Rs.4000
What proportion of customers would you expect to fall into each category? [W – 9]

Q – 12 The Asian currency crisis of late 1997 and early 1998 was expected to lead to substantial job
losses in US. The Economic Policy Institute estimated that the mean number of job losses would be
126,681. Assume that the number of jobs lost is normally distributed with a standard deviation of
30,000. Find the following probabilities.
1) the number of lost jobs between 80,000 and 150,000
2) the number of lost jobs will be greater than 150,000
3) the number of lost jobs will be exactly 126,681
4) the number of lost jobs will be greater than 130,000
5) the number of lost jobs between 130,000 and 140,000 [S – 12]

Q – 13 The mean of a binomial distribution is 40 and standard deviation 6. Calculate parameters of

binomial distribution. [S – 14 - N]

Q – 14 Define a binomial distribution. What are the assumptions used in binomial distribution. Suppose
the random variable X is binomially distributed with n = 15 and p = 0.4. Find E(x), V(x) and
P(X>=3) [S – 12]

Q – 15 A certain business school has 400 students in its MBA program. One hundred sixteen of students
are married. Determine by using the binominal distribution. [S – 13] & [S – 14] & [S – 15]
(1) The probability that exactly 2 of 3 randomly selected students is married.
(2) The probability that exactly 4 of 13 students’ chosen at random are married.

Q – 16 Solve the following, by using the binomial tables. [W - 13]

(a) If n = 20, p = .70, find P(x < 12) (b) If n = 20 , p = .90, find P(x < 16)
(c) If n = 15, p = .40, find P(4 < x < 9) (d) If n = 10, p = .60, find P(x > 7)

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 17 Given a binomial distribution with n = 30 and p = 0.04, use the Poisson approximation to the
binomial to find [S – 12]
1) P(X=25) 2) P(X=3) 3) P(X=5) 4) P(X>1)

Q – 18 The proportion of defective components produced by a company is 0.6%. The components are
sold in boxes of 250 and the company guarantees to replace any box containing more than three
defectives. The cost of each replacement box is Rs 400. The company is thinking about introducing
a more comprehensive inspection scheme that would cost Rs 20 per component box but would
eliminate all defective. Use the Poisson approximation to the binomial to decide whether this
inspection scheme is worthwhile. [W – 13 - N]

Q – 19 The Poisson distribution of annual trips per family to amusement parks gives average of 0.6 trips
per year. What is the probability of randomly selected family did not make a trip to an amusement
park last year? What is the probability of randomly selected family took three or fewer trips to
amusement parks over a three years period? 4 - [S – 12 – N]

Q – 20 Suppose that every lot of 100 computer chips a company produces, an average of 1.4 is defective.
Another buys many lots of these chips at a time, from which one lot is selected randomly and test
foe defects. If the tested lot contains more than three defects, the buyer will reject all the lots sent
in the batch. What is the probability that the buyer will accept the lots? Assume that the defects
per lot are Poisson distributed. [S – 11 – E] & [W – 14]

Q – 21 The number of accidents of workers in an assembly plant on each day is observed for a 50 day
period and is assumed to have a Poisson distribution. Use α = 0.01 to test the assumption that the
accidents follow a Poisson distribution. The following data is observed.
No. of Accidents 0 1 2 3 4 5
No. of days 25 15 8 0 1 1 [W – 13 - N]

Q – 22 A pen company averages 1.2 defective pens per carton produced. The number of defects per
carton is Poisson distributed. If the each carton is of 200 pens, find following probabilities.
(i)Randomly selected carton do not have any defective pen
(ii)Randomly selected carton is having 8 or more defective pens. [W – 11 – N]

Q – 23 According to the UN environmental program and WHO, in Mumbai air pollution standards for
particular matter are exceeded an average of 5.6 days in every three week period. Assume that the
distribution of number of days exceeding the standards per three week period is Poisson
distribution.
(1) What is probability that the standard is not exceeded on any day during three week period?
(2) What is probability that the standard is exceeded exactly 6 days of three week period? [S – 13]

Q – 24 On Monday mornings, The First National Bank only has one teller window open for deposits and
withdrawals. Experience has shown that the average number of arriving customers in a 4- minute
interval on Monday mornings is 2.8, and each teller can serve more than the number efficiently.
The random arrivals at this bank on Monday mornings are Poisson distribute.
a. What is the probability that on a Monday morning exactly six customers will arrive in 4 – minute
interval?
b. What is the probability that five or more customers will arrive at the bank during 8 – minute
period? [W – 9]

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 25 The average number of annual trips per family to amusement parks in the India is Poisson
distributed, with a mean of 0.6 trips per year. What is the probability of randomly selecting an
Indian family and finding the following: [W – 11]
I. The family did not make a trip to an amusement park last year?
II. The family took exactly one trip to an amusement park last year?
III. The family took two or more trips to amusement parks last year?
IV. The family took three or fewer trips to amusement parks over a three – year period?
V. The family took exactly four trips to amusement parks during a six – year period?

Q – 26 Use the following data and α = 0.01 to determine whether the observed frequencies represent a
uniform distribution.
Category 1 2 3 4 5 6 7 8
F0 19 17 14 18 19 21 18 18 [S – 11 – E] & [S – 15]

Q – 27 The following table gives the number of aircraft accidents that occurred during the various days of
the week. Test the H0, whether the accidents are uniformly distributed over the week. [S – 14 - N]
Days Monday Tuesday Wednesday Thursday Friday Saturday
No of
Accidents 14 18 12 11 15 14

Q – 28 The retail price of a medium sized box of a well-known brand of cornflakes ranges from $2.80 to
$3.14. Assume these prices are uniformly distributed. What are the average price and standard
deviation of prices in the distribution? If a price is randomly selected from this list, what is the
probability that it will be between $3.00 and $3.10? 4 - [W – 12 –N]

Q – 29 According to the Association of Insurance Commissioners, the average annual cost for automobile
insurance in a state is Rs. 691. Suppose automobile insurance costs are uniformly distributed in
the state with a range of from Rs. 200 to Rs. 1,182. What is the standard deviation of the uniform
distribution? What is the height of the distribution? What is the probability that a person’s annual
cost for automobile insurance in the state is between Rs. 410 and Rs.825? [S – 10]

Q – 30 A company CEO is worried about an elderly employee’s ability to keep up the minimum work
pace. In addition to the normal daily breaks, this employee stops for short rest periods an average
of 4.1 times per hour. The rest period is a fairly consistent 3 minutes each time. He decided that if
the probability of the employee resting for 12 minutes (not including normal breaks) or more per
hour is greater than 0.5, he will move the employee to a different job. Should he do so?
5 - [W – 12 –N]

Q – 31 According to Information Resources, which publishes data on market share for various products,
Oreos control about 10% of the market for cookie brands. Suppose 20 purchasers of cookies are
selected randomly from the population. What is the probability that fewer than four purchasers
choose Oreos? [S – 14 - N]

Q – 32 The India customs agency routinely checks all passengers arriving from foreign countries as they
enter the India. The department reports that the number of people per day found to be carrying
smuggled goods as they enter India through SVP airport in Ahmedabad averages 40 and has a
standard deviation of 10. What is the probability that in 6 days at the airport, the average number
of passengers found carrying smuggled goods will exceed 54? [W – 14 – N]

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 33 Suppose a random sample of size 36 is drawn from a population with a mean of 278. If 86% of the
time the sample mean is less than 280, what is the population standard deviation? [W - 13]

Q – 34 The probability that a blade manufactured by a factorzy is defective is 1/500. Blades are packed in
packets of 10 blades. Find the expected number of packets containing (i) no defective blade (ii)
one defective blade. 5 - [S – 10] & [S – 14]

Q – 35 Suppose that 5 men out of 100 and 25 women out of 1000 are colour blind. A colour blind person
is chosen at random. What is the probability of his being male (assuming that males and females
are in equal proportion)? 5 - [W – 10 – E]

Q – 36 In a bolt factory, machines A, B, C manufacture 25%, 35%, 40% bolts respectively. Out of these
bolts, 5%, 4%, 12% defective ones came from machines A, B, C respectively. Find the probability
that a bolt found to be defective came from machine B. [S – 15 – N]

Q – 37 According to a study by agency, 0.21 of the credit card users are very close to their limit of credit
card. Suppose a random sample of 600 card users is taken. What is the probability that more than
150 credit card users are very close to the total limit on their cards? 5 - [S – 12 – N]

Q – 38 The mean number of patients admitted per day to the emergency room of a small hospital is 3.5. If
on a given day, there are only five beds available for new patients, what is the probability the
hospital will not have enough beds to accommodate its newly admitted patients? [S – 14]

Q – 39 A candidate is selected for interview of management trainees for 3 companies. For the first
company there are 12 candidates, for the second there are 15 candidates and for the third there
are 10 candidates. What are the chances of his getting job at least at one company? [S – 14 - N]

Q – 40 Ram Patel, a horticulturist at Agriculture university, knows that a certain strain of corn will always
produce between 65 and 155 bushels per acre. For a confidence level of 95 percent, how many 1 –
acre samples must be taken in order to estimate the average production per acre to within ±5
bushels per acre? [W – 14 – N]

Q – 41 Three machines producing 40%, 35% & 25% of the total output are known to produce with
defective proportion of items as 0.04, 0.06 and 0.03 respectively. On a particular day, a unit of
output is selected at random and is found to be defective. What is the probability that it was
produced by the second machine? [S – 11] & [S – 14]

Q – 42 An X-ray technician is taking readings from her machine to ensure that it adheres to federal safety
guidelines. She knows that the standard deviation of the amount of radiation emitted by the
machine is 150 milligrams, but she wants to take reading until the standard error of sampling
distribution is no higher than 25 milligrams. How many reading should she take? 5 - [W – 10 – E]

Q – 43 Suppose a subdivision of “Aadarsh society scam” of Mumbai, Maharashtra, contains 1500 houses.
The subdivision was built in year 2009. A sample of 100 houses is selected randomly and
evaluated by an appraiser. If the mean of appraised value in this subdivision for all houses is Rs
177000, with a standard deviation of Rs 8,500, what is the probability that the sample average is
greater than Rs 185000. ( Given for z > 6 ; p(x)=0.5000) [S – 14 - N]

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert

Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 44 Concert pianist Priyank has become quite upset at the number of coughs occurring in the audience
just before he begins to play. On his latest tour, Priyank estimates that on average eight coughs
occur just before the start of his performance. Mr. Priyank has sworn to her conductor that if he
hears more than five coughs at tonight’s performance, he will refuse to play. What is the
probability that he will play tonight? 5 - [W – 10 – E]

Q – 45 Consider a newspaper circulation department where it is known that 84% of the household in a
particular neighborhood subscribe to the daily edition of the paper. In addition, it is known that
the probability that a household who already holds a daily subscription also subscribes to the
Sunday edition is 0.75. By clearly defining the events, what is the probability that a household
subscribes to both Sunday and daily editions of the newspaper? [S – 12]

Q – 46 A leading journal on economics publishes some statistics on the job market. 40% of all workers
say they would change their job for higher pay. 88% companies say that there is a shortage of
qualified candidates. Suppose 16 workers are randomly contacted and asked if they would change
jobs for higher pay, what is the probability that nine or more say yes? If 13 companies selected,
what is the probability that all of the companies say there is a shortage of qualified candidates?
[S – 12 – N]

Q – 47 The recent census study derives that 0.6 of all Indian household have ceiling fans. 29 % of all
households have an exhaust fans. Suppose 0.13 of all Indian households have both a ceiling fan
and an exhaust fan. If a household is randomly selected, what is probability that the household has
a ceiling fan or an exhaust fan? What is the probability that the household has neither a ceiling fan
nor an exhaust fan? What is the probability that the household does have a ceiling fan and does
not have an exhaust fan? [S – 12 – N]

Q – 48 A small independent physicians’ practice has three doctors. Dr. Shah sees 41% of the patients, Dr.
Patel sees 32%, and Dr. Jadeja sees the rest. Dr. Shah request blood test on 5% of her patients, Dr.
Patel request blood test on 8% of his patients, and Dr. Jadeja request blood test on 6% of her
patients An Auditor randomly selects a patient from past week and discovers that patient had a
test as a result of the physician visit. Knowing this information, what is the probability that the
patient saw Dr. Patel? For what percentage of all patients at this practice are blood tests
requested? [W – 9]

Q – 49 The marks obtained in statistical Method paper in MBA first semester examination of a
management institute has mean as 75 and standard deviation 10. If 250 students appeared at the
examination, estimate the number of students, scoring:
(i) Less that 70 marks
(ii) More than 90 marks [S – 11]

Q – 50 The city bank of Rajkot has recently begun a new credit program. Customers meeting certain
credit requirements can obtain a credit card accepted by participating area merchants that carries
a discount. Past number show that 30 percent of all applicants for this card are rejected. Given that
credit acceptance or rejection is a Bernoulli process, out of 15 applicants, what is the probability
that
A. Exactly 5 will be rejected?
B. Exactly 9 will be rejected?
C. Fewer than 2?
D. More than 12? [W – 14 – N]
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Subject Expert QA – 1 - (2015- 16) Module - 2
Q – 51 A business convention holds its registration from 9:00 a.m. until 12:00. Past history has shown
that registrant average arrival rate is 1.8 every 15 seconds.
1. What is the probability that 25 seconds or more would pass between registration
arrivals?
2. Suppose the registration computers went down for 1 – minute period. Would this
condition pose a problem? What is the probability that at least 1 minute will elapse
between arrivals. [S – 11]

Q – 52 Harry is the mayor of a large city. Lately, he has become concerned about the possibility that large
numbers of people who are drawing unemployment cheques are secretly employed. His assistants
estimate that 40 percent of unemployment beneficiaries fall into this category, but he is not
convinced. He asks one of the aides to conduct a quiet investigation of 10 randomly selected
unemployment beneficiaries.
I. If the mayor’s assistants are correct, what is the probability that more than eight of the
individuals investigated have jobs?
II. If the mayor’s assistants are correct, what is the probability that only three of the
investigated individuals have jobs? 4 - [W – 12 –N]

Q – 53 A survey was conducted by GTU about hiring procedure. Only 54% of the responding companies
review the applicants’ college transcript, 44% consider faculty references. 35% of all companies
use both the applicants’ college transcript and faculty references.
(a) What is the probability that a randomly selected company uses either faculty references
or college transcript?
(b) What is the probability that a randomly selected company uses either faculty references
or college transcript but not both as a part of the hiring procedures?
(c) What is the probability that a randomly selected company uses neither faculty
references nor college transcript as a part of the hiring procedures? [W - 13]

Q –54 (I) Fill in the blanks; write the most appropriate answer:
1. Probability of Sunday in a given week …………
2. If two events A & B are mutually exclusive P(A∩B)=…….
3. In a Poisson distribution μ=100 , find σ =………
4. In a binomial distribution n=100 , p=0.5 , find σ2 =………
(II) In a survey of 100 readers, it was found 40 read magazine A, 15 read magazine B, and 10 read
both. What is the probability of a person reading at least one of the magazines? [S – 14 - N]

Q – 55 A company produces 16 personal computers knowing that 4 of them have defective wiring. The
company that purchased the computers is going to test the 3 of the computers. The purchasing
company can detect the defective wiring. Use Hypergeometric distribution to determine the
probability that the purchasing company will find the following?
a. No defective computers b. exactly three defective computers. [S – 13 – N]

MBA Sem – 1 K.D. SiR – 9898281509 Subject Expert