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Tutorial 5 - The Continuous and Normal Distribution

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Tutorial 5 - The Continuous and Normal Distribution

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nylanaroses
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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BUSINESS STATISTICS MDB2013

TUTORIAL 5

1. A uniform distribution is defined over the interval from 6 to 10.


a. What are the values for a and b?
b. What is the mean of this uniform distribution?
c. What is the standard deviation?
d. Show that the total area is 1.00.
e. Find the probability and area of a value more than 7.
f. Find the probability and area of a value between 7 and 9.

2. According to the Insurance Institute of America, a family of four spends between $400
and $3,800 per year on all types of insurance. Suppose the money spent is uniformly
distributed between these amounts.
a. What is the mean amount spent on insurance?
b. What is the standard deviation of the amount spent?
c. If we select a family at random, what is the probability and area they spend
less than $2,000 per year on insurance?
d. What is the probability and area a family spends more than $3,000 per year?

3. Customers experiencing technical difficulty with their Internet cable service may call
an 800 number for technical support. It takes the technician between 30 seconds and 10
minutes to resolve the problem. The distribution of this support time follows the
uniform distribution.
a. What are the values for a and b in minutes?
b. What is the mean time to resolve the problem? What is the standard deviation
of the time?
c. What percent of the problems take more than 5 minutes to resolve?
d. Suppose we wish to find the middle 50% of the problem-solving times. What
are the end points of these two times?

4. The mean of a normal probability distribution is 60; the standard deviation is 5.


a. About what percent of the observations lie between 55 and 65?
b. About what percent of the observations lie between 50 and 70?
c. About what percent of the observations lie between 45 and 75?

5. The Kamp family has twins, Rob and Rachel. Both Rob and Rachel graduated from
college 2 years ago, and each is now earning $50,000 per year. Rachel works in the
retail industry, where the mean salary for executives with less than 5 years’ experience
is $35,000 with a standard deviation of $8,000. Rob is an engineer. The mean salary for
engineers with less than 5 years’ experience is $60,000 with a standard deviation of
$5,000. Compute the z values for both Rob and Rachel, and comment on your findings.
BUSINESS STATISTICS MDB2013
6. A recent article in the Cincinnati Enquirer reported that the mean labor cost to repair a
heat pump is $90 with a standard deviation of $22. Monte’s Plumbing and Heating
Service completed repairs on two heat pumps this morning. The labor cost for the first
was $75, and it was $100 for the second. Assume the distribution of labor costs follows
the normal probability distribution. Compute z values for each, and comment on your
findings.

7. The mean of a normal probability distribution is 400 pounds. The standard deviation is
10 pounds.
a. What is the area between 415 pounds and the mean of 400 pounds?
b. What is the area between the mean and 395 pounds?
c. What is the probability of selecting a value at random and discovering that it
has a value of less than 395 pounds?

8. Suppose the Internal Revenue Service reported that the mean tax refund for the year
2017 was $2,800. Assume the standard deviation is $450 and that the amounts refunded
follow a normal probability distribution.
a. What percent of the refunds are more than $3,100?
b. What percent of the refunds are more than $3,100 but less than $3,500?
c. What percent of the refunds are more than $2,250 but less than $3,500?

9. Among the thirty largest U.S. cities, the mean one-way commute time to work is 25.8
minutes. The longest one-way travel time is in New York City, where the mean time is
39.7 minutes. Assume the distribution of travel times in New York City follows the
normal probability distribution and the standard deviation is 7.5 minutes.
a. What percent of the New York City commutes are for less than 30 minutes?
b. What percent are between 30 and 35 minutes?
c. What percent are between 30 and 50 minutes?

10. Assume that the hourly cost to operate a commercial airplane follows the normal
distribution with a mean of $2,100 per hour and a standard deviation of $250. What is
the operating cost for the lowest 3% of the airplanes?

11. The SAT Reasoning Test is perhaps the most widely used standardized test for college
admissions in the United States. Scores are based on a normal distribution with a mean
of 1500 and a standard deviation of 300. Clinton College would like to offer an honours
scholarship to students who score in the top 10% of this test. What is the minimum
score that qualifies for the scholarship?

12. The cost per item at a supermarket follows an exponential distribution. There are many
inexpensive items and a few relatively expensive ones. The mean cost per item is $3.50.
What is the percentage of items that cost:
a. less than $1?
b. more than $4?
c. between $2 and $3?

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