Narsee Monjee Institute of Management Studies

Statistical Analysis for Business Decisions MBA Core 2014-15

Sampling and Sampling Distributions.

1. A population is made up of groups that have wide variation within each group but little
variation from group to group. The appropriate type of sampling for this population is
a) Stratified b) Systematic c) Cluster d) Judgement

2. The local cable television company is planning to add one channel to its basic service.
There are five channels to choose from, and the company would like some input from its
subscribers. There are about 20,000 subscribers, and the company knows that 35 percent
of these are college students, 45 percent are white-collar workers, 15 percent are blue-
collar workers, and 5 percent are other. However, the company believes there is much
variation within these groups. Which of the following sampling methods is more
appropriate: random, systematic, stratified, or cluster sampling?

3. A nonprofit organization is conducting a door-to-door opinion poll on municipal day-care

4. At the U.S. Mint in Philadelphia, 10 machines stamp out pennies in lots of 50. These lots
are arranged sequentially on a single conveyor best, which passes an inspection station.
An inspector decides to use systematic sampling in inspecting the pennies and is trying to
decide whether to inspect every fifth or every seventh lot of pennies. Which is better?
Why?

5. A Senate study on the issue of self-rule for the District of Columbia involved surveying
2,000 people from the population of the city regarding their opinions on a number of
issues related to self-rule. Washington, D.C., is a city in which many neighborhoods are
poor and many neighborhoods are rich, with very few neighborhoods falling between the
extremes. The researchers who were administering the survey had reasons to believe that
the opinions expressed on the various questions would be highly dependent on income.
Which method was more appropriate, stratified sampling or cluster sampling? Explain
briefly.

6. A population is made up of groups that have wide variation within each group but little
variation from group to group. The appropriate type of sampling for this population is
a) Stratified
b) Systematic
c) Cluster
d) Judgment
7. The state occupational safety board has decided to do a study of work related accidents
within the state, to examine some of the variables involved in the accidents, such as the
type of job, the cause of the accident, the extent of the injury, the time of day, and
whether the employer was negligent. It has been decided that 250 of the 2,500 work-
related accidents reported last year in the state will be sampled. The accident reports are
filled by date in a filing cabinet. Marsha Gulley, a department employee, has proposed
that the study use a systematic sampling technique and select every tenth report in the file
for the sample. Would her plan of systematic sampling be appropriate here? Explain.

8. In a sample of 25 observations from a normal distribution with mean 98.6 and standard
deviation 17.2
a) What is P(92 <x < 102)?
b) Find the corresponding probability given a sample of 36.

9. Mary Bartel, an auditor for a large credit card company, knows that, on average, the
monthly balance of any given customer is $112, and the standard deviation is $56. If
Mary audits 50 randomly selected accounts, what is the probability that the sample
average monthly balance is
a) Below $100?
b) Between $100 and $130?

10. In a sample of 19 observations from a distribution with mean 18 and standard deviation
4.8,
a) What is P(16<x <20)?
b) What is P (16 ≤x ≤ 20)?
c) Suppose the sample size is 48. What is the new probability in part (a)?

11. In a normal distribution with mean 56 and standard deviation 21, how large a sample
must be taken so that there will be at least a 90 percent chance that its mean is greater
than 52?

12. An astronomer at the Mount Palomar Observatory notes that during the Geminid meteor
shower, an average of 50 meteors appears each hour, with a variance of 9 meteors
squared. The Geminid meteor shower will occur next week.
a) If the astronomer watches the shower for 4 hours, what is the probability that at least
48 meteors per hour will appear?
b) If the astronomer watches for an additional hour, will this probability rise or fall?
Why?

13. The average cost of a studio condominium in the Cedar Lakes development is $62,000
and the standard deviation is $4,200.
a) What is the probability that a condominium in this development will cost at least
$65,000?
b) Is the probability that the average cost of a sample of two condominiums will be at
least $65,000 greater or less than the probability of one condominium’s costing that
much? By how much?
14. Robertson Employment Service customarily gives standard intelligence and aptitude tests
to all people who seek employment through the firm. The firm has collected data for
several years and has found that the distribution of scores is not normal, but is skewed to
the left with a mean of 86 and a standard deviation of 16. What is the probability that in
a sample of 75 applicants who take the test, the mean score will be less than 84 or greater
than 90?

15. A recent study by the EPA has determined that the amount of contaminants in Minnesota
lakes (in parts per million) is normally distributed with mean 64 ppm and variance 17.6 .
Suppose 35 lakes are randomly selected and sampled. What is the probability that the
sample average amount of contaminants is
a) Above 72 ppm?
b) Between 64 and 72 ppm?
c) Exactly 64 ppm?
d) Above 94 ppm?
e) If, in our sample we found x = 100 ppm, would you feel confident in the study
conducted by the EPA? Explain briefly.

16. Farmer Braun, who sells grain to Germany, owns 60 acres of wheat fields. Based on past
experience, he knows that the yield from each individual acre is normally distributed with
mean 120 bushels and standard deviation 12 bushels. Help Farmer Braun plan for his
next year’s crop by finding
a) The expected mean of the yields from Farmer Braun’s 60 acres of wheat.
b) The standard deviation of the sample mean of the yields from Farmer Braun’s 60
acres.
c) The probability that the mean yield per acre will exceed 123.8 bushels.
d) The probability that the mean yield per acre will fall between 117 and 122 bushels.

17. A ferry carries 25 passengers. The weight of each passenger has a normal distribution
with mean 168 pounds and variance 361 pounds squared. Safety regulations state that for
this particular ferry, the total weight of passengers on the boat should not exceed 4,250
pounds more than 5 percent or the time. As a service to the ferry owners, find
a) The probability that the total weight of passengers on the ferry will exceed 4,250
pounds.
b) The 95th percentile of the distribution of the total weight of passengers on the ferry.
Is the ferry complying with safety regulations?

18. Tread-On-Us has designed a new tire, and they don’t know what the average amount of
tread life is going to be. They do know that tread life is normally distributed with a
standard deviation of 216.4 miles.
a) If the company samples 800 tires and records their tread life, what is the probability
the sample mean is between the true mean and 300 miles over the true mean?
b) How large a sample must be taken to be 95 percent sure the sample mean will be
within 100 miles of the true mean?
19. An X-ray technician is taking readings from her machine to ensure that it adheres to
federal safety guidelines. She knows that the standard deviation of the amount of
radiation emitted by the machine is 150 millirems, but she wants to take readings until the
standard error of the sampling distribution is no higher than 25 millirems. How many
readings should she take?