Final Assignment
Business Statistics I
BST 1308
Section B
Submitted to:
Muhammad Hasan Al-Mamun
Assistant Professor
SOBE, UIU
Submitted by:
Sazzadul Alom Munna
ID: 111 192 056
School of Business & Economics
United International University
Date of Submission: September 21, 2020
Problem-1: The Wall Street Journal reported that Walmart Stores inc. is planning to lay off 2300
employees at its Sam’s Club warehouse unit. Approximately half of the layoffs will be hourly
employees (the Wall Street Journal, January 25–26, 2014). Suppose the following data represent
the percentage of hourly employees laid off for 15 Sam’s Club stores.
55 56 44 43 44 56 60 62 57 45 36 38 50 69 65
[a] Compute the mean and median percentage of hourly employees being laid off at these stores.
[b] Compute the first and third quartiles.
[c] Compute the range and interquartile range.
[d] Compute the variance and standard deviation.
[e] Do the data contain any outliers?
[f] Based on the sample data, does it appear that Walmart is meeting its goal for reducing the
number of hourly employees?
Solution to the problem no 1 (a)
Arranging the values from minimum to maximum,
36, 38, 43, 44, 44, 45, 50, 55, 56, 56, 57, 60, 62, 65, 69.
We know,
Mean =
=
=
= 52
Again we know,
In median, L = 50
So, Median, L50 = (n+1)
= (15+1)
=8
That means median is located in 8th position
So median is 55
Solution to the problem no 1 (b)
Computing the first and third quartiles:
We know, the first quartiles L25 = (n+1)
= (15+1)
=4
That means 1st quartiles is located in 4th position
So 1st quartiles is 44
Again we know,
The third quartiles L75 = (n+1)
= (15+1)
= 12
That means 3rd quartiles is located in 12th position
So 3rd quartiles is 60
Solution to the problem no 1 (c)
We know,
Range = Maximum value – Minimum value
= 69-36
= 33
And,
Interquartile range = 3rd quartiles – 1st quartiles
= 60 - 44
= 16
Solution to the problem no 1 (d)
Computing the variance and standard deviation:
Here the sample mean is ̅ = 52 (from a)
Now, constructing a table for the purpose of calculating sample mean variance and standard
deviation below,
x (x - ̅̅̅ (x - ̅̅̅2
36 -16 256
38 -14 196
43 -9 81
44 -8 64
44 -8 64
45 -7 49
50 -2 4
55 3 9
56 4 16
56 4 16
57 5 25
60 8 64
62 10 100
65 13 169
69 17 289
Total = 780 Total = 0 Total = 1402
∑( ̅
We know sample variance, s2 =
= 100.143
Again we know, sample standard deviation is the squared root of sample variance.
∑( ̅
So, Sample standard deviation, s = √
=√
= 10.007
So, the sample variance is 100.143 and the standard deviation is 10.007.
Solution to the problem no 1 (e)
Finding whether the data contain any outliers or not:
Here, First quartile, Q1 = 44
Third quartile, Q3 = 60
So, the maximum outlier = Q3 + 1.50 (Q3 – Q1)
= 60 + 1.50 (60 – 44)
= 84
And the minimum outlier = Q1 – 1.50 (Q3 – Q1)
= 44 – 1.50 (60 – 44)
= 20
We can see all the values in the data set are higher than 20 and not above 84. So there is no
outlier in the given data set.
Solution to the problem no 1 (f)
As Walmart wants to reduce approximately half of the employees, so if the interquartile range is
the half of the median, then we can say Walmart is meeting its goal.
Here we’ve got the interquartile range is 16 (from c) and the median is the 8th value which is 55
(from a). So Walmart is meeting its goal for reducing the number of hourly employees.
Problem-2: A survey of magazine subscribers showed that 45.8 per cent rented a car during the
past 12 months for business reasons, 54 per cent rented a car during the past 12 months for
personal reasons and 30 per cent rented a car during the past 12 months for both business and
personal reasons.
[a] What is the probability that a subscriber rented a car during the past 12 months for business
or personal reasons?
[b] What is the probability that a subscriber did not rent a car during the past 12 months for
either business or personal reasons?
Solution to the problem no 2 (a)
Let the probability for business reason be X and for personal reason Y
X = Rented a car during the past 12 months for business reasons = 45.8%
So P(X) =
= 0.458
Y = Rented a car during the past 12 months for personal reasons = 54%
So P(Y) =
= 0.540
And 30% rented a car during the past 12 months for both business and personal reasons.
So probability of both business and personal reasons,
P(X and Y) =
= 0.300
So, the probability of a subscriber rented a car business or personal reasons during the past 12
months is,
P (X or Y) = P (X) + P (Y) – P (X and Y)
= 0.458 + 0.540 – 0.300
= 0.698
So the probability that a subscriber rented a car during the past 12 months for business or
personal reasons is 0.698 or 69.8%.
Solution to the problem no 2 (b)
By applying the complement rule, we can calculate the probability of a subscriber not renting a
car either for business reasons or personal reasons in the past 12 months. And the complement
rule is,
P (neither X nor Y) = 1- P (X or Y)
= 1- 0.698
= 0.302
So, the probability that a subscriber did not rent a car during the past 12 months for either
business or personal reasons is 0.302 or 30.2%
Problem-3: The Eco Pulse survey from the marketing communications firm Shelton Group
asked individuals to indicate things they do that make them feel guilty (Los Angeles Times,
August 15, 2012). Based on the survey results, there is a .39 probability that a randomly selected
person will feel guilty about wasting food and a .27 probability that a randomly selected person
will feel guilty about leaving lights on when not in a room. Moreover, there is a 0.12 probability
that a randomly selected person will feel guilty for both of these reasons.
[a] What is the probability that a randomly selected person will feel guilty for either wasting food
or leaving lights on when not in a room?
[b] What is the probability that a randomly selected person will not feel guilty for either of these
reasons?
Solution to the problem no 3 (a)
Let the probability for randomly selected guilty person about wasting food be X and guilty
person about leaving lights on when not in room be Y
Here,
Feeling guilty about wasting food = X
So, P(X) = 0.390
Feeling guilty about leaving lights on = B
So, P(Y) = 0.270
And probability that a randomly selected person will feel guilty for both of these reasons is 0.120
So, P (X and Y) = 0.120
So, the probability that a random selected person will feel guilty for either wasting food or
leaving lights on when not in a room
P (X or Y) = P (X) + P(Y) – P (X and Y)
= 0.390 + 0.270 – 0.120
= 0.540
So, the probability that a randomly selected person will feel guilty for either wasting food or
leaving lights on when not in a room is 0.540 or 54%.
Solution to the problem no 3 (b)
By applying the complement rule, we can calculate the probability of that a randomly selected
person will not feel guilty for either of these reasons, and the complement rule is,
P (Neither X nor Y) =1- P (X and Y)
= 1- 0.540
= 0.460
So the probability that a randomly selected person will not feel guilty for either of these reasons
is 0.460 or 46%.
Problem-4: There are 100 employees at Kiddie Carts International. Fifty-seven of the employees
are hourly workers, 40 are supervisors, 2 are secretaries, and the remaining employee is the
president. Suppose an employee is selected:
[a] What is the probability the selected employee is an hourly worker?
[b] What is the probability the selected employee is either an hourly worker or a supervisor?
[c] Refer to part (b). Are these events mutually exclusive?
[d] What is the probability the selected employee is neither an hourly worker nor a supervisor?
Solution to the problem no 4 (a)
Let,
The probability of the selected employee is an hourly worker ‘A’
The probability of the selected employee is a supervisor ‘B’
The number of hourly workers = 57
The number of total employers = 100
So, the probability of a selected employee is an hourly worker
P(A) =
= 0.570
So the probability of the selected employee is an hourly worker is 0.570 or 57%.
Solution to the problem no 4 (b)
Here,
The number of supervisors = 40
The number of total employers = 100
So the probability of a selected employee is a supervisor
P(B) =
= 0.40
And the probability of a selected employee is either an hourly worker or a supervisor is,
P (A or B) = P(A) + P(B)
= 0.57 + 0.40
= 0.970
So the probability the selected employee is either an hourly worker or a supervisor is 0.970 or
97%.
Solution to the problem no 4 (c)
We know when two events cannot occur at the same time then the events are mutually exclusive.
Here refer to part (b), an employee cannot be a supervisor and an hourly worker at the same time
so the events of part (b) are mutually exclusive.
Solution to the problem no 4 (d)
By applying the complement rule, we can calculate the probability of selected employee is
neither an hourly nor a supervisor. And the complement rule is,
P (Neither A nor B) = 1- P (A or B)
= 1- 0.97 (from b)
= 0.030
So the probability of selected employee is neither an hourly nor a supervisor is 0.030 or 3%.
Problem-5: Fred Friendly, CPA, has a stack of 20 tax returns to complete before the April 15th
deadline. Of the 20 tax returns, 12 are from individuals, 5 are from businesses, and 3 are from
charitable organizations. He randomly selects two returns. What is the probability that:
[a] Both are businesses?
[b] At least one is a business?
Solution to the problem no 5 (a)
Here,
Total number of tax returns is 20
From Individuals = 12
From Businesses = 5
From Charitable Organizations = 3
After selecting two returns randomly the possible outcomes are,
1st selected return Individuals Businesses Charitable
Organizations
2nd selected return
Individuals II BI CI
Businesses IB BB CB
Charitable IC BC CC
Organizations
So the probability that both are from businesses is, = 0.112 or 11.2%.
Solution to the problem no 5 (b)
The possible outcome where at least one of them is from business is IB, BI, BB, BC, CB
The probability is =
= 0.556
So the probability that at least one is a business is 0.556 or 55.6%.
Problem-6: Fred exercises regularly. His fitness log for the last 12 months shows that he jogged
30% of the days, rode his bike 20% of the days, and did both on 12% of the days. What is the
probability that Fred would do at least one of these two types of exercises on any given day?
Solution to the problem no 6
Let,
He jogged 30% of the days be X
He rode 20% of the days be Y
So, P (X) =
= 0.30
And
P (Y) =
= 0.20
Did both on 12% of the days,
So, P (X and Y) =
= 0.12
The probability that Fred would do at least one of these exercises on any given day,
P (X or Y) = P (X) + P (Y) - P (X and Y)
= 0.30 + 0.20 - 0.12
= 0.380
So the probability that Fred would do at least one of these two types of exercises on any given
day is 0.380 or 38%.
Problem-7: A recent survey reported in Bloomberg BusinessWeek dealt with the salaries of
CEOs at large corporations and whether company shareholders made money or lost money.
CEO Paid More CEO Paid Less Total
Than $ 1 Million Than $ 1 Million
Shareholders 2 11 13
made money
Shareholders 4 3 7
lost money
Total 6 14 20
If a company is randomly selected from the list of 20 studied, what is the probability?
a. The CEO made more than $1 million?
b. The CEO made more than $1 million or the shareholders lost money?
c. The CEO made more than $1 million given the shareholders lost money?
d. Of selecting two CEOs and finding they both made more than $1 million?
Solution to the problem no 7 (a)
Here,
The total number of CEO who made more than $1 million is = 6
The total number of CEO is = 20
Let the CEO made more than $1 be X
So, the probability of randomly selecting a CEO who made more than $1 million is,
P (X) =
= 0.300
So the probability of the CEO made more than $1 million is 0.300 or 30%.
Solution to the problem no 7 (b)
Here,
the total number of shareholders who lost money is 7
Let the shareholders lost money be Y
So, P (Y) =
= 0.350
Now the shareholders lost money and CEO made more than $1 million,
P(X and Y) =
= 0.200
So, the probability of the CEO made more than $1 million or the shareholders lost money is,
P (X or Y) = P(X) + P(Y) - P(X and Y)
= 0.30 + 0.35 - 0.20
= 0.450
Solution to the problem no 7 (c)
The probability of the CEO made more than $1 million given the shareholders lost money is,
P( | =
= 0.571
So the probability of the CEO made more than $1 million given the shareholders lost money is
0.571 or 57.1%.
Solution to the problem no 7 (d)
Here,
The first CEO made more than $1 million = X1
So, P (X1) =
= 0.30
The second CEO made more than $1 million = X2
So, P (X2) =
= 0.30
The probability of both getting selected = P(X1) P(X2)
= 0.30x0.30
=0.090
So, the probability of selecting two CEOs and finding they both made more than $1 million is
0.090.
Problem-8: The probability distribution for the random variable X follows.
X P (X)
20 0.20
25 0.15
30 0.25
35 0.40
[a] Is this probability distribution valid? Explain.
[b] What is the probability that X = 30?
[c] What is the probability that X is less than or equal to 25?
[d] What is the probability that X is greater than 30?
Solution to the problem no 8 (a)
After adding all the probabilities of the probability distribution
∑ ( = 0.20+0.15+0.25+0.40
=1
This probability distribution is valid as we know the probability distribution will be valid only if
the summation of all the probabilities of the probability distribution is equals to 1.
Solution to the problem no 8 (b)
According to the information given in the question the probability of X = 30 is P(x3) = 0.25
Solution to the problem no 8 (c)
Here,
X = 20 P(x1) = 0.20
X = 25 P(x2) = 0.15
In these outcomes the value of X could be equal or less than 25
So, the probability of X is less than or equal to 25 is,
P (x1 or x2) = P (x1) + P (x2)
= 0.20 + 0.15
= 0.350
So the probability that X is less than or equal to 25 is 0.350 or 35%.
Solution to the problem no 8 (d)
The only outcome where X can be greater than 30 is where X= 35.
The probability of X = 35 is P(x4) = 0.400
So the probability that X is greater than 30 is 0.400 or 40%.
Problem-9: The following table provides a probability distribution for the random variable X.
X P (X)
X P (X)
3 0.25
6 0.50
9 0.25
[a] Compute the expected value of X.
[b] Compute the variance of X.
[c] Compute the standard deviation of X.
Solution to the problem no 9 (a)
The expected value of X is,
=∑ (
= 3*0.25+6*0.50+9*0.25
=6
Solution to the problem no 9 (b)
We know, variance of a probability distribution is
∑( (
= (3-6)2 * 0.25 + (6-6)2 * 0.50 + (9-6)2 * 0.25
= 2.25 + 0 + 2.25
= 4.50
The variance of X is 4.5 (ans)
Solution to the problem no 9 (c)
The standard deviation,
√∑ ( (
=√ [value from (b)]
= 2.121
The standard deviation is 2.121
