Normal Distribution

problems
 Example 1
• The average daily sales of 500 branch
offices was 150 thousand and the S.D
Rs.15 thousand . Assuming the
distribution to be normal, indicate how
many branches have sales between
• Rs. 120 thousand and Rs. 145 thousand
• Rs. 140 thousand and Rs. 165 thousand
 Cont..
• 1) P(120<=X<=145)=p(-2<=Z<=-.33)
• =0.4772-0.1293
• =0.3479
• Expected number of branches
• =0.3479 X 500 = 174
• 2) 0.5899 x 500=295
 Example 2
• We have a training program designed to
upgrade the supervisory skills of
production line supervisors. Because the
program is self administrated, supervisors
require different number of hours to
complete the program. A study of the past
participants indicates that the mean length
of time spent on the program is 500 hrs.
and that this normally distributed random
variables has a standard deviation of 100
hrs.
• What is the probability that a participant
selected at random will require more than
500 hrs to complete the program?
• What is the prob that a candidate selected
at random will have between 500and 650
hrs to complete the training program?
• What is the prob that a candidate selected
at random will take more than 700 to
complete?
• prob that a particular person chosen at
random would require between 550 and
650 hrs to complete ?
• What is the probability that a participant
selected at random will require less than
580 hrs to complete?
• What is the prob that a candidate chosen
at random will take between 420 and 570
hrs to complete the programm?
 Example 2
• There are 600 business students in the
graduate department of a university, and the
probability for any student to need a copy of a
particular textbook from the university library on
any day is 0.05 . How many copies of the book
should be kept in the university library so that
the probability may greater than 0.90 that none
of the students needing a copy from the library
has to come Back disappointed ?
• ( use normal approximation to the binomial )
 Cont..
• Mean= np= 600 x 0.05=30
• Variance=npq= 600 x 0.05 x 0.95
• = 28.5
 Example 3
• As a result of tests on 20,000 electric fans
manufactured by a company, it was found
that lifetime of the fans was normally
distributed with an average life of 2040
hours and standard deviation of 60 hours.
On the basis of the information, estimate
the number of fans that is expected to run
for (a) more than 2150 hours and (b) less
than 1960 hours.
 Cont..
• A)
• X =2150, mean=2040 S.D=60
• Z=1.833
• Area to the right of 1.833=0.5-0.4664
• =0.0366
• The no. of fans=0.0366 x 20000=672
• B)
• The no. of fans =1836
 Example 4
• A complex television component has 1000
joints by machine which is known to
produce on average, one defect in forty.
The components are examined, and faulty
soldering corrected by hand. If
components requiring more than 35
corrections are discarded, what proportion
of the components will be thrown away?
 Cont..
• Normal as limiting case of Poisson
distribution
• The average no. of defects=1000 x
0.025=25
S.D=sqrt(25)=5
SD of Poisson distribution = root of mean
• Z=(35-25)/5 = 2
• Area=0.5-0.4772=0.0228 2.28%
 Example 4
• Reema Group of Builders is working on the project of a
Multiplex in the heart of the city. The Builders offer good
quality amenities. The Group need 5000 electric fans
there in Multiplex. Purchase manager of the builder is
trying to set up a contract with the Khaitan Company. The
marketing manager of the Khaitan Company has
provided with the following details from the quality control
department. The average life time of fans is 4 years with
a standard deviation of 1 year. The company offers a
warrantee of 2 years (with replacement). Cost per fan is
2500/- with a profit of 15%.
• Now the purchase manager of the builder is negotiating
for a 10% discount or warrantee of one more year.
Assuming you as the marketing manager of Khaitan
group plan the business.
 Example 5
• The manager of a small postal substation is
trying to quantify the variation in the weekly
demand for mailing tubes. The information from
quality control department is that this demand is
normally distributed. Further from the earlier
records she knows that on average 100 tubes
are purchased weekly and that 90% of the time,
weekly demand is below 115.
• The manager wants to stock enough mailing
tubes each week so that the chance of running
out of tubes is not higher than 0.05. Assuming
you in place of manager decide the stock level.
 Cont.
• μ= 100 σ=?
• P(x<115)= p(z<(115-100)/ σ)=0.90
• =p(z<1.28)
• 115-100)/ σ = 1.28
• σ = 11.72
• P(x>?)=0.05 = P(z > (?-100)/11.72)=0.05=
• P(z>1.64)
• (?-100)/11.72=1.64
• ?=119.22
• The lowest suitable stock level is 120 tubes.
 Example 6
• The Gilbert Machinery Company has received a
big order to produce electric motors for a
manufacturing company. In order to fit in its
bearing, the drive shaft of the motor must have a
diameter of 5.1 + 0.05 (inches). The company’s
purchasing agent realizes that there is a large
stock of steel rods in inventory with a mean
diameter of 5.07” and a S.D of 0.07’. Assume
that you are the purchase manager of the
company. Are you going to prepare the
purchase order?
 Cont..
• μ= 5.07 σ=0.07
• P(5.05< x <5.15)=
• P(-.029 < z < 1.14)=
• 0.1141+.3729= 0.4870
•
 Example 7
• The managing director of spiffy Lube auto lubrication Ltd.
has asked his purchase manager to revise his policy on
ordering grease gun cartridges. Currently, he orders 110
cartridges per week, but he runs out of cartridges 1 out
of every 4 weeks. He know that on average, the shop
uses 95 cartridges per week. He is also willing to
assume that demand for cartridges is normally
distributed.
• If the manager wants to order enough cartridges so that
his chance of running out during any week is no greater
than 0.2, revise purchasing policy.
 Cont..
• μ= 95 σ=?
• P(x>110)=P(z>((110-95)/ σ))=0.25
=P(z>0.67)
• (110-95)/ σ)=0.67
• σ=22.39
• P(x>?)=0.2 = P(z>0.84)
• (?-95)/22.39 =0.84
• ?=113.81
 Example 8
• Harley Davidson, Director of quality control for the Kyoto
Motor company, is conducting his monthly spot check of
automatic transmissions. In this procedure 10
transmissions are removed from the pool of components
and are checked for manufacturing defects. Historically,
only 2% of the transmissions have such flaws. (assume
that flaws occur independently in different transmissions)
• If the sample contains more than 2 transmissions with
manufacturing flaws, the company has to revise its
contract with King Motors Ltd. with 10 % discount. What
is the chance of revising the contract?
• What is the chance of not revising the contract?
 Cont..
• P(more than 2 flaws)= 1–
[ p(0 flaw)- P(1 flaw)-P(2 flaws)]
=0.0009 (revising )
p=0.02 n=10
q=1-p = 0.98
Binomial distribution = ncx px qn-x
P(0 flaw)= 10c0 p0 q10-0 =0.8171 (not revising)
P(1 flaw)= 10c1 p1 q10-1 =0.1667
P(2 flaws)= 10c2 p2 q10-2 =0.0153
 Example 9
• Diane Bruns is the mayor of a large city. Lately, she has
become concerned about the possibility that large
numbers of people who are drawing unemployment
checks are secretly employed. Her assistants estimate
that 40% of unemployment beneficiaries fall into this
category, but Ms. Bruns is not convinced. She asks one
of her aids to conduct a quiet investigation of 10
randomly selected unemployment beneficiaries.
• If the mayors’ assistants are correct, what is the chance
that more than eight of the individuals investigated have
jobs?
• If the mayors’ assistants are correct, what is the
probability that only three of the individuals investigated
have jobs?
 Cont..
• n=10
• p=0.40
• q=1-p= 0.60
• Binomial distribution= ncx px qn-x
• P(more than 8 have jobs)=[p(x=9) +p(x=10)]
=0.0016 + 0.0001= 0.0017
P(3 have jobs)=10c3 (0.40)3 (0.60)7 = 0.2150
 Example 10
• A month later, Mayor Bruns picks up the morning edition
of the city’s leading newspaper, the Times of India , and
reads an expose of unemployment fraud. In this article,
the newspaper claims that out of every 15
unemployment beneficiaries, the chance that four or
more have jobs is 0.9095 and the expected number of
employed beneficiaries exceeds 7. you are a special
assistant to Mayor Bruns, who must respond to these
claims at an afternoon press conference. She asks you
to find the answers to the following two questions
• Are the claims of the Times of India consistent with each
other?
• Does the first claim conflict with the opinion of mayor’s
assistants?
 Cont..
• Binomial
• n=15
• p=?
• Claim 1
• p(x > 4)=0.9095 p=0.40
• Claim 2
• np>p p >7/15 = 0.467
• The claims are not consistent
• No. the assistants claim that p=0.40
 Example 11
• R.V.Poppin, the concession stand manager for
thee local hockey rink, just had 2 cancellations
on his crew. This means that if more than 72,000
people come to tonight’s hockey game, the lines
for hot dogs will constitute a disgrace to Mr.
Poppin and will harm business at future games.
Mr. Poppin knows from experience that the
average number of people who come to the
game is 67000 with a deviation of 4000 people.
• What is the future of Mr. Poppin’s business?
 Cont..
• Suppose Mr. Poppin can hire two temporary
employees to make sure business won’t be
harmed in the future at an additional cost of
$200. If he believes the future harm to business
of having more than 72,000 fans at the game
would be $5,000. There will be no harm if 72,000
or fewer fans show up, and that the harm due to
too many fans doesn’t depend on how many
more than 72,000 show up. Should he hire the
employees?. Explain.
 Cont..
• P(x>72000)=P(z>1.25)=0.5-.3944=.1056
• Loss to the future business=$528
 Assignment
• Application of Bayes’ theorem
• Case 4
• (“ Statistics for management” ---
• Richard Levin )