Statistics for Mgmt.

II-Examples

1. Suppose a salary of employees in a given firm is positively skewed with average value of
10,000 birr and standard deviation of 1000 birr. If 100 employees are randomly selected, find

the probability for the sample mean ( X ) to be

A. Between mean and 10,200 birr
B. Less than or equal to 10,200 birr
2. Consider that the production level of a flour producing firm is normally distributed with
standard deviation of 800 K.g. If 64 production days are selected randomly, find the

probability for the sample mean ( X ) to be within 200 K.g of population mean.

3. Suppose that a population proportion is 0.4. It is known that 80% of the time you draw a
random sample from this population; you will get a sample proportion of 0.35 or more.
Assuming a normal distribution, find the sample size (n).
4. Suppose that 60% of the population in a given region consume Coca-Cola soft drink. What
is the probability of taking a random sample of size 100 from the aforementioned population
and finding that 0.55 or less use that brand of soft drink?
5. The average production level of firm A is 70 units with population variance of 200 units and
that of firm’s B average production level is 50 units with population variance of 480 units. If
100 employees from firm A and 240 employees firm B are chosen randomly, find the

probability for X 1 to be greater than or equal to X 2 by

A. 16 units
B. 24 units

C. Find the probability for X 1 > X 2

6. Suppose 80% of employees applied for the job in firm A using an information from
newspaper advertisement, while the figure is 70% for firm B. If 100 employees are selected

randomly from each firm, find the probability that sample proportion one ( P 1) exceeds

sample proportion two ( P 2) by at least

A. 0.04
B. 0.16

C. Find the probability that ( P 1) is greater than or equal to ( P 2)

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7. Suppose a sample mean value is known to be 20 and also the sample size is 64. If the
population standard deviation is 16 and assuming that the population is normally distributed,
construct a confidence interval estimate of population mean using 95% confidence level.
8. The confidence interval estimate of population mean is between 60 and 70 with 98%
confidence level. If the population standard deviation is 10 find the sample size (n).
9. Suppose a sample mean value is known to be 20 and also the sample size is 16. If the sample
standard deviation is 4 and assuming that the population is normally distributed, construct a
confidence interval estimate of population mean using 98% confidence level.

10. Recently, a study of 81 randomly selected companies with telemarketing operation was
completed. The study revealed that 40% of the sampled companies had used telemarketing
to assist them in order processing. Using this information estimate the population proportion
of telemarketing companies that use their telemarketing operation to assist them in order
processing taking a 95% confidence level.
11. Out of randomly selected 200 employees, 40 employees are satisfied with benefit scheme of
the organization. Based on the given data, an expert proposed 5% margin of error. Construct
an interval estimate of population proportion.
12. The productivity level of employees in firm A and B is not exactly known. 100 employees
are chosen randomly from each company in which the productivity level of firm A is 200 birr
and that of firm B is 200 birr. If the population variance is 100 birr for firm A and 150 birr
for firm B, construct an interval estimate for the difference between two populations mean
(U1-U2) using 95% confidence level.

13. A company recently has completed the survey regarding the response of its junior and senior
employees for using sales promotion to promote the new product. Out of randomly selected
90 senior employees, 60% of the them support the proposal, while 40% of the randomly
selected
100 junior employees are in favor the proposal. Construct the confidence interval estimate of
the difference between two population proportions using 95% confidence level.
14. A Company claims that its daily average production is exactly equal to 10000 K.g. A
random sample of 64 production days are chosen and the average production level is

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 estimated at 9800 k.g. Assuming that the population standard deviation is 800 k.g ,test
company’s claim using a 5% level of significance.
15. An employee union is on strike demanding a better salary. The union claims that the mean
salary of employees does not exceed 10,000 birr per month. The legislator does not want to
reject the union’s claim unless the evidence is very strong. Assume that salaries follow a
normal distribution and the population standard deviation is known to be Birr 3000. A
random sample of 100 teachers is obtained, and the sample mean is Birr, 11,200. Test claim
using 1% significance level.
16. A firm is studying the delivery times for two raw material suppliers. The firm is basically
satisfied with supplier A and is prepared to stay with this supplier provided that the mean
delivery time is the same or less than that of supplier B. However if a firm finds that the
mean delivery time from supplier B is less than that of supplier A, it will begin making raw
material purchases from supplier B. Test the claim using the following data and 5% level of
significance
Supplier A Supplier B

n1 = 50 n2 = 30

X 1 = 14 days X 2 = 12.5 days

S.D1 = 3 days S.D2 = 2 days

17. In a sample of 400 units of product produced by machine I, 200 units are defective. On the
other hand, in a sample of 400 units produced by machine II, 160 units are defective. Using 5
% level of significance, test the hypothesis that the rate of defective is the same for both
machines.
18. A manager of high rise condominium development expresses to his lender that the average
family income of his tenants is at least birr 42,000. Since the lender also holds mortgage on
large number of these unit, a sample of reported family income can be easily obtained. A

random sample of 40 files finds average family income X =36,000 and standard deviation
of16,000. Assume that family income is normally distributed. Has the manager overstated
average family income? Use = 0.01.

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19. A magazine claims that at least 25% of its readers are college students. A random sample of
200 readers is taken and it is found that 40 of these readers are college students. Use a 1%
level of significance and test the magazine’s claim.
20. A manager of HR for XYZ Company provided the following data showing the selection of
12 employees among 80 applicants for vacant positions.
Applicant Status
Selected Not selected Total
Male 7 33 40
Female 5 35 40
Total 12 68 80
Test the hypothesis that selection of applicant is independent of gender at a significance level of
1%.

21. ETHIO Plastic Factory sells its products in three primary colors: Red, blue, and yellow. The
marketing manager feels that customers have no color preference for the product. To test this
hypothesis the manager set up a test in which 120 purchases were given equal opportunity to
buy the product in each of the three colors. The results were that 60 bought red, 20 bought
blue, and 40 bought yellow. Test the marketing manager’s null hypothesis, using =0.05.
22. The Ethiopian postal service is interested in modeling the “mangled letter” problem. It has
been suggested that any letter sent to a certain area has a 0.15 chance of being mangled.
Since the post office is so big, it can be assumed that two letters chances of being mangled
are independent. A sample of 310 people was selected, and two test letters were mailed to
each of them. The number of people receiving zero, one, or two mangled letters was 260, 40,
and 10, respectively. At the 0.10 level of significance, is it reasonable to conclude that the
number of mangled letters received by people follows a binomial distribution with P = 0.15?
23. Manager of INOVA plastic bags manufacturing company wants to know
if there is a difference in Motivation advancement between Positions
(Office Workers and Manufacturing Workers) in his company. To check
this, the manager surveyed 300 workers and obtained the following
summary of table data.

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 Motivation Advancement Positions
Office Manufacturing Total
Workers Workers
Motivated 20 180 200
Not Motivated 30 70 100
Total 50 150 300
Then,
 Which type of test can be applied to check whether there is a
difference in motivational advancement between Office Workers
and Manufacturing Workers?
 Using 1% level of significance, conduct the appropriate test and
draw your conclusion in determining whether there is a difference in
motivational advancement between Office Workers & Manufacturing
Workers
24. The number of automobile accidents occurring per day in a particular city is believed to have
a Poisson distribution with λ is equal to 1 accident per day. A sample of 80 days during the
past year gives the data shown below. Do the data support the belief that the number of
accidents per day has a Poisson distribution? Use α = 0.05.

No. of 0 1 2 3
accidents
Observed 34 25 11 10
freq.
(days)
25. The training director of a company is trying to evaluate three different methods of training
new employees. The first method assigns each to an experienced employee for individual
help in the factory. The second method puts all new employees in a training room separate
from the factory, and the third method uses training films and programmed learning
materials. The training director chooses 18 new employees assigned at random to the three
training methods and records their daily production after they complete the programs. Below
are productivity measures for individuals trained by each method.

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 Method Method Method
1 2 3
45 59 41
40 43 37
50 47 43
39 51 40
53 39 52
44 49 37
271 288 250
X 1 = 45.17 X 2 = 48.00 X 3 = 41.67 X = 44.94
S21 = 30.17 S22 = 47.60 S23 = 31.07

Using 5% level of significance, do the three training methods lead to different levels of
productivity?
26. An accounting firm has developed three methods to guide its seasonal employees in
preparing individual income tax returns. In comparing the effectiveness of these methods, a
test is set up in which each of 10 seasonal employees is randomly assigned to use one of the
three methods in preparing a hypothetical income tax return. The preparation times (in
minutes) are shown in Table below.
Method 1 Method 2 Method 3
15 10 18
20 15 19
19 11 23
14
Sum 68 36 60
Average 17 12 20
Variance 8.67 7 7
Calculate F and at 1 % level of significance, can we conclude that the three Methods could be equally
effective?

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