INDIVIDUAL ASSIGNMENT 2

MAS202
Business Statistics
Your full name: Truong Thanh My
RollNumber CS170501
Class: BA1706

SCENARIO 1: A company producing orange juice buys all its oranges from a large orange
orchard. The amount of juice that can be squeezed from each of these oranges is
approximately normally distributed with a mean of 4.7 ounces and some unknown standard
deviation. The company’s production manager knows that the probability is 30.85% that a
randomly selected orange will contain less than 4.5 ounces of juice.
1. Using the function NORM.S.INV in Mircosoft Excel to estimate 𝜎 √𝑛 where 𝑛 is the
sample size used by company’s production manager..
1. What is the probability that a randomly selected orange will contain between 4.5 and 5.2
ounces of juice?
2. What is the probability that a randomly selected orange will contain between 4.2 and 4.9
ounces of juices?
3. What is the probability that a randomly selected orange will contain at least 4.9 ounces of
juices?
4. What is the probability that a randomly selected orange will contain more than 4.2 ounces
of juices?

Answer
1. Using the function NORM.S.INV in Mircosoft Excel to estimate 𝜎 √𝑛 where 𝑛 is the
sample size used by the company’s production manager.
P(X<4.5)= 30.85% or P(X<4.5)= 0.3085=>
Z value at 0.3085 = -0.5001
Calculate the population standard deviation:
<=>-0.5001=(4.5-4.7)/ standard deviation=> standard deviation= 0.4
2. What is the probability that a randomly selected orange will contain between 4.5 and 5.2
ounces of juice?
P(4.5<X<5.2) = ((4.5-4.7)/0.4)<Z<((5.2-4.7)/0.4) = P(-0.5<Z<1.25)
P(4.5<Z<5.2) = P(Z<1.25)-P(Z<0.5) = 0.8944-0.3085 = 0.5859
3. What is the probability that a randomly selected orange will contain between 4.2 and 4.9
ounces of juice?
P(4.2<X<4.9) = ((4.2-4.7)/0.4)<Z<((4.9-4.7)/0.4) = P(-1.25<Z<0.5)
P(4.2<X<4.9) = P(Z<0.5)-P(Z<-1.25) = 0.6915-0.1056 = 0.5859
4.What is the probability that a randomly selected orange will contain at least 4.9 ounces of
juices?
P(X≥4.9) = P(X≥(4.9-4.7)/0.4) (=) P(Z≥0.5) = 1- P(X≤4.9)
P(Z≥0.5) = 1-P(Z≤0.5) = 1-0.6915 = 0.3085
5.What is the probability that a randomly selected orange will contain more than 4.2 ounces
of juices?
P(X>4.2) (=) P(Z>4.2-4.7)/0.4) (=) P(Z>-1.25)
P(X>4.2) = 1-P(X≤4.2)
(=) P(Z>-1.25) = 1- P(X≤-1.25) = 1-0.1056 = 0.8944
SCENARIO 2: The time spent studying by students in the week before final exams follows
a normal distribution with a standard deviation of 8 hours. A random sample of 4 students
was taken to estimate the mean study time for the population of all students.
1. What is the probability that the sample mean exceeds the population mean by more than 2
hours?
2. What is the probability that the sample mean is more than 3 hours below the population

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mean?
3. What is the probability that the sample mean differs from the population mean by less than
2 hours?
Answer:
The formula for the probability distribution of the sample mean is:

We can use a standard normal distribution to find the probabilities of different z – z-scores,
which are standardized values of the sample mean. The formula for z – score is:

Find the probability that the

sample mean exceeds the
population mean
by more than 2 hours, we need
to find the z-score that
corresponds to 2
hours above the population
mean:
To find the probability that the sample mean exceeds the population mean by more than 2
hours, we need to find the z-score that corresponds to 2 hours above the population mean:
The probability that z is less
than this value, which is the
area under the
curve to the left of this point.
We can subtract this
probability from 1 to
get the probability that z is
greater than this value, which
is the area
under the curve to the right of
this point. That is:
The probability that z is less than this value, which is the area under the curve to the left of
this point. We can subtract this probability from 1 to get the probability that z is greater than
this value, which is the area under the curve to the right of this point. That is:

We have a standard deviation of 8 hours, n=4

There is about a 30.85% chance that the sample mean exceeds the population mean by more
than 2 hours.
2. What is the probability that
the sample mean is more than
3 hours
below the population mean?
2. What is the probability that the sample mean is more than 3 hours below the population
mean?
We need to find the z-score that corresponds to 3 hours below the population mean:

We can find the probability that z is less than this value, which is the area under the curve to
the left of this point. That is:

We have a standard deviation of 8 hours, n=4

So there is about a 22.66% chance that the sample mean is more than 3 hours below the
population mean

mean
3. What is the probability
that the sample mean
differs from the
population mean by less than 2
hours?
3. What is the probability that the sample mean differs from the population mean by less
than 2 hours?

we need to find the z-scores

that correspond to 2 hours
above and below
the population mean. That is:
we need to find the z-scores that correspond to 2 hours above and below the population
mean. That is:

So there is about a 38.30% chance that the sample mean differs from the population mean by
less than 2 hours.

We can use a standard normal

distribution to find the
probabilities of
different z-scores, which are
standardized values of the
sample mean.
The formula for z-score is:
SCENARIO 3:
A poll was conducted by the marketing department of a video game company to
determine the popularity of a new game that was targeted to be launched in three months.
Telephone interviews with 1,500 young adults were conducted which revealed that 49% said
they would purchase the new game. The margin of error was ±3 percentage points.

1. What is the sampling error?

2. What is the needed sample size to obtain a 95% confidence interval estimate of the
percentage of the targeted young adults who will purchase the new game by allowing the
same level of margin of error?

3. What is the needed sample size to obtain a 95% confidence interval in estimating the
percentage of the targeted young adults who will purchase the new game to within±5% if
you do not have the information on the 49% in the interviews who said that they would
purchase the new game?

Answer
1. What is the sampling error?
The difference between the sample result and the true population value it represents. The
sample result is 49% who said they would purchase the new game. Since the margin of error
is ±3 percentage points, the sampling error would be ±3percentage points
2. What is the needed sample size to obtain a 95% confidence interval estimate of the
percentage of the target young adults who will purchase the new game by allowing the same
level of margin of error?
To calculate the needed sample size to obtain a 95% confidence-interval estimate
with the same level of margin of error, we can use the formula:

n is the sample size

Z is the Z-score (1.96 for a 95% confidence interval)
p is the estimated proportion (0.49 in this case)
e is the margin of error (0.03 in this case)
Since you cannot have a fraction of a person, you would round up to the nearest whole
number. So, the required sample size is approximately 1067 young adults.
3. What is the needed sample size to obtain a 95%confidence interval in estimating the
percentage of the target young adults who will purchase the new game to within±5% if you
do not have the information on the 49% in the interviews who said that they would purchase
the new game?
Without information on the 49%, So, use a worst-case scenario for p. The worst-case
scenario is p = 0.5 (50%), which provides the maximum sample size required.

The needed sample size to obtain a 95% confidence interval estimate within ±5% without
information on the proportion of young adults who will purchase the new game is 384.
SCENARIO 4:
The Three Brothers Energy Drink Company bottles and distributes a popular drink for
athletes and exercise enthusiasts. Because of its marketing successes the company has
installed an additional filling machine and the managers are eager to use it in daily
operations. The machine is set to fill bottles at 16 oz. However, we know there is inherent
machine variability and quality control has determined through testing a mean of 16.2 oz.
and a standard deviation of 0.3 oz. using a 100 bottle sample.
1. In calculating a 90% confidence interval for the population what would be the
sampling error?
2. Find a 90% confidence interval for the mean volume of the filled bottle contents
3. Suppose you want to estimate the population mean fill with 95% confidence and
0.04 oz. sampling error rate. What should be your sample size?
Answer:
1. In calculating a 90% confidence interval for the population what would be the sampling
error?

Zα/2 = 1.645 for a 90% confidence level

Using the formula:
Sampling
Error = e = Zα/2*(α/n)
(=) e = 1.645*(0.3/sqrt(100)
e = 0.04935
So, the sampling error for a 90% confidence interval is 0.04935 oz. sampling error
2. Find a 90% confidence interval for the mean volume of the filled bottle contents
Confidence interval = sample mean ± Zα/2*(α/sqrt(n))
= 16.2 1.6450.3100
= 16.2 ± 0.04935
= (16.15065 and16.24935)
So, a 90% confidence interval for the mean volume is (16.15065 oz and 16.24935 oz).
3. Suppose you want to estimate the population mean fill with 95% confidence and
0.04 oz. sampling error rate. What should be your sample size?
n = (Zα/2)^2*α^2/e^2 = 1.96^2*0.3^2/0.04^2 = 216
The required sample size is 216.
SCENARIO 5:
One of the biggest issues facing e-retailers is the ability to turn browsers into buyers.
This is measured by the conversion rate, the percentage of browsers who buy something in
their visit to a site. The conversion rate for a company’s website was 10.1%. The website at
the company was redesigned in an attempt to increase its conversion rates. A sample of 200
browsers at the redesigned site was selected. Suppose that 24 browsers made a purchase.
The company officials would like to know if there is evidence of an increase in conversion
rate at the 5% level of significance.
1. What critical value should the company officials use to determine the rejection region?
2. Is it true if the company officials can conclude that there is sufficient evidence that
the conversion rate at the company’s website has increased using a level of significance of
0.05?
3. What will be the p-value if these data were used to perform a two-tail test?

Answer:
1. What critical value should the company officials use to determine the rejection region?
Null hypothesis (H0): The conversion rate after the website redesign is the same as before or
lower.
Alternative hypothesis (H1): The conversion rate after the website redesign is higher than
before.
So will use a one-tailed test. n=200
The upper tail of the t distribution contains an area of 0.05, and the critical value of the t
distribution with d. f = 200 - 1 = 199 degrees of freedom is approximately 1.645.
The critical value should the company officials use to determine rejection region: 1.645
2. Is it true if the company officials can conclude that there is sufficient evidence that the
conversion rate at the company’s website has increased using a level of significance of
0.05? Sample mean=0.12; population mean=0.101
Since 0.89 < 1.645 we fail to reject H0 and conclude that the increase is not significant.
3. What would be the p-value if these data were used to perform a two-tail test?
H0: = 0.101
H1: # 0.101
n = 200. Decided to use α/2 = 2.5% or 0.025
Z ≈ 0.8917
To find the p-value for a two-tailed test, we need to calculate the probability of observing a
test statistic as extreme as 0.8917 or more extreme in either tail of the standard normal
distribution.
Using a standard normal distribution table or statistical software, we find that the probability
of getting a Z-statistic greater than 0.8917 is approximately 0.1871. Since this is a two-tailed
test, we need to double this probability.
Therefore, the p-value for this two-tailed test is approximately 2 * 0.1871= 0.3742.
Since the p-value (0.3742) is greater than the significance level (α =0.05), we do not reject
the null hypothesis. There is not enough evidence to conclude that the conversion rate has
increased after the website redesign.
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