SULIT INDEX NUMBER : ____________________

Second Semester Examination

2021/2022 Academic Session

July/August 2022

ABW 504 – Statistics for Analytics

(Statistik untuk Analitik)
Duration : 2 hours
(Masa : 2 jam)

Please check that this examination paper consists of EIGHT (8) pages of printed
material before you begin the examination.

[Sila pastikan bahawa kertas peperiksaan ini mengandungi LAPAN (8) muka surat
yang bercetak sebelum anda memulakan peperiksaan ini].

Instructions: Answer ALL questions. You must answer the questions in English.

[Arahan: Jawab SEMUA soalan. Anda mesti menjawab soalan dalam bahasa Inggeris.]

Write your index number in the answer space.

[Tulis nombor angka giliran dalam ruangan / kertas jawapan anda.]

PLAGIARISM is strictly prohibited. Kindly take note that USM will not tolerate any form
of plagiarism which include direct copying, rephrasing, taking someone else’s idea and
putting it in different words, or directly quoting passages or ideas but citing the work as a
general source. The penalty for plagiarism is an F grade if found guilty by the University
Disciplinary Committee.

...2/-
SULIT

1
Answer ALL questions.

Question 1 (25 Marks)

a) Cross County Bicycles makes two mountain bike models that each come in three
colors. The following table shows the production volumes for last week:

Model Color
Blue Brown White
XB-50 302 105 200
YZ-99 40 205 130

(i) Based on the relative frequency assessment method, compute the probability
that a manufactured item is brown.
[3 marks]

(ii) Compute the probability that the product manufactured is blue or white.

[3 marks]

(iii) Using the conditional probability formula, Compute the joint probability that a
product manufactured is a YZ-99 and brown.

[3 marks]

b) Assume that a standard deck of 52 playing cards is randomly shuffled and the first
2 cards are dealt to you (A blackjack is where one card is an ace, and the other
card is worth 10 points. The 10-point cards are kings, queens, jacks and 10's)

(i) Compute the probability that you have a blackjack given that the first card dealt
to you is an Ace.
[6 marks]
(ii) Compute the probability that you have a blackjack given that the second card
dealt to you is an Ace.
[6 marks]
(iii) Compute the probability that you have a blackjack.

[4 marks]

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Question 2 (25 Marks)

a) It is thought that the time between customer arrivals at a fast-food business is

exponentially distributed with λ equal to 5 customers per hour. Given this
information, perform computations to determine the mean time between arrivals
in minutes.
[5 marks]

b) It is assumed that the time customers spend in a record store is uniformly

distributed between 3 and 12 minutes. Based on this information,

(i) Report the mean time customers spend in a record store.

[1 mark]

(ii) Report the standard deviation.

[2 marks]
(iii) Report the probability that a customer will spend more than 9 minutes in the
record store.

[2 marks]
c) For a standardized normal distribution, using the standard normal distribution
(Appendix 1), report the probability for (-1.28 < z < 1.75).

[5 marks]

d) The weight of sacks of potatoes is normally distributed with a mean of 20 pounds

and a standard deviation of 2 pounds. The weight of sacks of onions is also
normally distributed with a mean of 20 pounds and a standard deviation of 0.50
pounds. Based on this information, discuss which product will yield the highest
probability of getting a very heavy sack.

[5 marks]

e) After completing a study, Chicago O’Hare Airport managers have concluded that
the time needed to get passengers loaded onto an airplane is normally distributed
with a mean equal to 10 minutes and a standard deviation equal to 2 minutes.
Using the standard normal distribution (Appendix 1), report the probability that a
flight will take 15 or more minutes to get passengers loaded.

[5 marks]

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Question 3 (25 Marks)

a) The following values represent the population of home mortgage interest rates (in
precents) being charged by the banks in a particular city:

3.3 3.5 4.5 4 4.3

3.9 3.8 4.1 4.2 3.7

Given this information, report the smallest to largest range for the sampling error
possible if a random sample of n = 3 banks is surveyed and the mean loan rate is
calculated.

[10 marks]
b) In an effort to estimate the mean dollars spent per visit by customers of a food
store, the manager has selected a random sample of 100 cash register receipts.
The mean of these was $45.67 with a sample standard deviation equal to $12.30.
Assuming that he wants to develop a 90 percent confidence interval estimate and
given that the critical z for this confidence level is 1.645, perform computations for
the margin of error and confidence interval that will be reported.

[7 marks]
c) A study was recently conducted to estimate the mean cholesterol for adult males
over the age of 55 years. The following random sample data were observed:

245 304 135 202 300

196 210 188 256 390

Given this information, report the point estimate for the population mean.
[2 marks]
d) A traffic engineer plans to estimate the average number of cars that pass through
an intersection each day. Based on previous studies the standard deviation is
believed to be 52 cars. She wants to estimate the mean to within ±10 cars with 90
and 95 percent confidence. The critical z values for a 90% confidence interval and
for a 95% confidence interval are 1.645 and 1.96, respectively. Assist her by
determining the needed sample size (n) for number of days.

[6 marks]

4
Question 4 (25 Marks)

a) A major U.S. oil company has developed two blends of gasoline. Managers are
interested in determining whether a difference in mean gasoline mileage will be
obtained from using the two blends. As part of their study, they have decided to
run a test using the Chevrolet Impala automobile with automatic transmissions.
They selected a random sample of 100 Impalas using Blend 1 and another 100
Impalas using Blend 2. Each car was first emptied of all the gasoline in its tank and
then filled with the designated blend of the new gasoline. The car was then driven
200 miles on a specified route involving both city and highway roads. The cars
were then filled and the actual miles per gallon were recorded. The following
summary data were recorded:

Blend 1 Blend 2
Sample Size 100 100
Sample Mean 23.4 mpg 25.7 mpg
Sample St. Dev. 4.0 mpg 4.2 mpg

Based on the sample data,

(i) Compute and interpret the 95 percent confidence interval estimate for the
difference in mean mpg for the two blends.
[5 marks]

(ii) Using a 0.05 level of significance, Compute and interpret what conclusion
should the company reach about whether the population mean mpg is the same
or different for the two blends. Use the test statistic approach to test the null
hypothesis.
[5 marks]
b) A multiple regression is shown for a data set of yachts where the dependent
variable is the price in thousands of dollars.

(i) Explain why the overall model has significant ability to predict the price of a
yacht based on a 0.1 level of significance.

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 [2.5 marks]
(ii) Compute the percentage of variation in the dependent variable is explained by
the regression model.
[2.5 marks]

(iii) Explain which of the independent variables appear to be significantly helping

to predict the price of a yacht, using a 0.10 level of significance.
[2.5 marks]

(iv) Explain which of the independent variables appear to be significantly helping

to predict the price of a yacht, using a 0.05 level of significance.
[2.5 marks]

c) The following regression output is the result of a multiple regression application in

which we are interested in explaining the variation in retail price of personal
computers based on three independent variables, CPU speed, RAM, and hard
drive capacity. However, some of the regression output has been omitted. Given
this information and your knowledge of multiple regression, compute the adjusted
R2.

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 [5 marks]

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Appendices

Appendix 1: Standard normal distribution table