Question 1.

A retail company has recorded its daily sales (in thousands of dollars) over the past
week as follows: $11, $18, $12, $21, $19, $14, $16. Calculate the following:
a. (2 marks) The mean daily sales for the week.

∑Sales 11 + 18 + 12 + 21 + 19 + 14 + 16 111
Mean = = = ≈ 15.86
Number of days 7 7

b. (2 marks) The median daily sales for the week.

Sales in order: 11,12,14,16,18,19,21

Median = 16

c. (2 marks) The mode of the daily sales for the week.

There is no mode as no sales value is repeated.

d. (2 marks) The range of the daily sales for the week.

Range = Max − Min = 21 − 11 = 10

Question 2. A bag contains 7 red, 4 blue, and 3 green marbles. If a marble is drawn at random from
the bag, calculate the following probabilities:
a. (2 marks) The probability of drawing a red or green marble.
7 3 10 5
𝑃(Red or Green) = 𝑃(Red) + 𝑃(Green) = + = =
14 14 14 7
b. (2 marks) The probability of drawing a green marble.
3
𝑃(Green) =
14
c. (2 marks) The probability of NOT drawing a blue marble.
4 10 5
𝑃(Not Blue) = 1 − 𝑃(Blue) = 1 − = =
14 14 7
Question 3. In a survey of a company's employees, it was found that 65% of the employees are
satisfied with their job, 35% of the employees use public transport, and 20% of the employees are
satisfied with their job and use public transport.
Uses Public Does Not Use Marginal
Transport Public Transport Probability
Satisfied with Job 0.20 0.45 0.65
Not Satisfied with Job 0.15 0.2 0.35
Marginal Probability 0.35 0.65 1.00

a. (5 marks) Complete the following joint and marginal probability table. Show your calculations for
each probability.
𝑃(Satisfied and Does Not Use) = 𝑃(Satisfied) − 𝑃(Satisfied and Uses) = 0.65 − 0.20 = 0.45
𝑃(Not Satisfied and Uses) = 𝑃(Uses) − 𝑃(Satisfied and Uses) = 0.35 − 0.20 = 0.15
𝑃(Not Satisfied and Does Not Use) = 1 − (0.20 + 0.45 + 0.15) = 0.20
b. (3 marks) If an employee is selected at random, what is the probability that the employee is
satisfied with their job, given that they use public transport?
𝑃(Satisfied and Uses) 0.20
𝑃(Satisfied | Uses) = = ≈ 0.57
𝑃(Uses) 0.35
c. (3 marks) If an employee is selected at random, what is the probability that the employee uses
public transport, given that they are satisfied with their job?
𝑃(Satisfied and Uses) 0.20
𝑃(Uses | Satisfied) = = ≈ 0.31
𝑃(Satisfied) 0.65
Question 4. A tech startup is considering two pricing strategies for their new software product: a
low-price strategy (L) or a high-price strategy (H). The probabilities for the outcomes of the low-
price strategy are: Positive (0.6), Negative (0.4). For the high-price strategy, the probabilities are:
Positive (0.35), Negative (0.65).
a) (4 marks) Determine the overall probability of a positive or negative market response
irrespective of the pricing strategy (Hint: Construct a probability tree).
0.5*0.6 =0.3 0.5*0.4=0.2 0.5*0.35=0.175 0.5*0.65=0.325
P(Positive)=0.3+0.175=0.475
P(Negative)=0.2+0.325=0.525
b) (8 marks) Calculate the joint probabilities for all possible outcomes: P(L and P), P(L and N), P(H
and P), and P(H and N).
𝑃(𝐿 and 𝑃) = 𝑃(𝐿) × 𝑃(𝑃|𝐿) = 0.5 × 0.6 = 0.3
𝑃(𝐿 and 𝑁) = 𝑃(𝐿) × 𝑃(𝑁|𝐿) = 0.5 × 0.4 = 0.2
𝑃(𝐻 and 𝑃) = 𝑃(𝐻) × 𝑃(𝑃|𝐻) = 0.5 × 0.35 = 0.175
𝑃(𝐻 and 𝑁) = 𝑃(𝐻) × 𝑃(𝑁|𝐻) = 0.5 × 0.65 = 0.325
Question 5. A manufacturer of alkaline batteries has observed that its batteries last for an average
of 6.9 hours when used in a toy racing car. The amount of time is normally distributed with a
standard deviation of 2.1 hours.

a. (2 marks) What is the probability that the battery lasts between 6 and 8 hours?
6 − 6.9 8 − 6.9
𝑃(6 < 𝑋 < 8) = 𝑃 ( <𝑍< ) = 𝑃(−0.43 < 𝑍 < 0.52) ≈ 0.366
2.1 2.1
b. (2 marks) What is the probability that the battery lasts longer than 7 hours?
7−6.9
𝑃(𝑋 > 7) = 𝑃 (𝑍 > 2.1
) = 𝑃(𝑍 > 0.048) ≈ 0.481
c. (2 marks) What is the probability that the battery lasts less than 4 hours?
4 − 6.9
𝑃(𝑋 < 4) = 𝑃 (𝑍 < ) = 𝑃(𝑍 < −1.38) ≈ 0.084
2.1
d. (2 marks) What is the amount of time below which only 5% of all a battery lasts?
𝐹𝑖𝑛𝑑 𝑍 𝑠𝑢𝑐ℎ 𝑡ℎ𝑎𝑡 𝑃(𝑍 < 𝑍0.05 ) = 0.05
Using standard normal distribution tables:
𝑍0.05 ≈ −1.645
𝑋 = μ + 𝑍0.05 × σ = 6.9 + (−1.645) × 2.1 ≈ 3.45

Question 6. The employee database shows City, Gender, Age, and Salary of 340 samples from a car
manufacture company employee.
a. (4 marks) With 95% confidence level, estimate the average salary of men in city A. Repeat your
calculation for women in city C.

a. C_female vs. A_Male C_Female A_Male

x-bar 95,153 94,900
s 15918.89326 17756.74976
n 46 30
t_alpha/2 1.679427393 1.699127027
ME 3941.805467 5508.440907
CI [91211.5,99095.11] [89391.19,100408.07]

b. (3 marks) Regardless of which city they are working in, suppose you want to estimate the average
salary of men with 99% confidence level. According to historical data, you know the standard
deviation of the salary is $16,000. If you want the estimate to be within $2,500 of the true average
salary, what sample size would be required?

𝑍α/2 ⋅ σ 2 2.576 ⋅ 16000 2

𝑛=( ) =( ) ≈ 272
𝐸 2500
c. (2 marks) Estimate with 95% confidence the difference between the mean salary of men and
women in city A.

c. A_Male - A_female A_male A_female

x-bar 95,316 95,153
s 17,757 15,919
Variance 315,302,162 253,411,163
n 30 46

We can assume equal variances given that the variances are just 16.01% different. However, the
student can choose to go with unequal variances assumption.
 Equal variance assumption
df 74
s_pooled 16663.3053
t_alpha/2 1.992543495
mean difference 163
ME 7791.771619
LB -7,629
UB 7,955

Unequal variance assumption

df 57.23490426
t_alpha/2 2.002465459
mean difference 163
ME 8014.618879
LB -7,852
UB 8,178

Question 7. Refer to the employee database in question 6.

a. (2 marks) With 95% confidence level, can we conclude that the average salary of men in city A is
higher than average salary of men in city C?
Since the confidence intervals for females in group C and males in group A overlap, we cannot
compare the two sets using confidence intervals.
b. (2 marks) Are you agreed with this statement; “in city B, women employees are younger than
men”? Use 99% confidence level.

c. B_Male - B_female B_male B_female

x-bar 40 41
s 6.274702954 5.656265181
n 48 74
t_alpha/2 2.684555618 2.644868782
ME 2.431335875 1.739073883
CI [37.34,42.2] [39.34,42.82]
For the same reason, we cannot comment on this statement through confidence interval.
Note: For parts a and b, we can create a confidence interval for the difference between the two
groups. If the confidence interval includes 0, we can conclude that there is no significant difference
between the two groups. If it does not include 0, then there is a significant difference. However,
since this is covered after the hypothesis testing topic, students are not expected to answer this
question using the confidence interval method.
Question 8. In a large production plant, the operations manager wants to estimate the average
amount of time workers take to assemble a new computer keyboard. She guesses that the standard
deviation is 5 minutes. With 90% confidence level, if she wishes to estimate the mean assembly
time to within 30 seconds, how large a sample of workers should she take?
𝐵 = 0.5 minutes
𝑍α/2 = 1.645

𝑍α/2 ⋅ σ 2 1.645 ⋅ 5 2
𝑛=( ) =( ) = (16.45)2 ≈ 271
𝐵 0.5
Question 9. A TV producer company wants to determine the number of hours that people spend on
watching training programs. The company hired a statistician to survey 151 randomly selected
homes and determined the number of hours. (refer to the Excel file for data, TV Producer). Estimate
with 90% confidence the average hours that people spend on watching training programs.
𝑥̅ = 3.70; 𝑠 = 1.70; 𝑍α/2 = 1.645; 𝑛 = 151
𝑠
CI = 𝑥̅ ± 𝑍α/2 ⋅ = [3.47,3.93]
√𝑛

Question 10. In one survey, about project managers’ educational background, 390 operation
managers of medium and large construction companies were selected and asked about their
degrees. There were 108 PMPs. Estimate with 95% confidence the proportion of all project
managers of medium and large construction companies who have PMPs.
108
𝑝̂ = = 0.277
390

𝑝̂ (1 − 𝑝̂ )
CI = 𝑝̂ ± 𝑍α/2 ⋅ √ = [0.2325,0.3213]
𝑛