Numerical Descriptive

Statistics
Problem 1
Suppose that bank branch, located in a residential area, is also concerned with the noon-to-1
p.m. lunch hour. The waiting time, in minutes (defined as the time the customer enters the line
to when he or she reaches the teller window), of a sample of 15 customers during this hour is
recorded over a period of one week. The results are listed below:
9.66 5.90 8.02 5.79 8.73 3.82 8.01 8.35
10.49 6.68 5.64 4.08 6.17 9.91 5.47
a. Compute the mean, median, first quartile, and third quartile.
b. Compute the variance, standard deviation, range, interquartile range, and coefficient of
variation. Are there any outliers? Explain.
c. Are the data skewed? If so, how?
d. As a customer walks into the branch office during the lunch hour, he asks the branch
manager how long he can expect to wait. The branch manager replies, Almost certainly less
than five minutes. On the basis of the results of (a) through (c), evaluate the accuracy of this
Statement.
Solution
(a) Mean = 7.11, median = 6.68, Q1 = 5.64, Q3 = 8.73.

(b) Variance = 4.336, standard deviation = 2.082, range = 6.67, interquartile range = 3.09, CV =
29.27%.

(c) Because the mean is greater than the median, the distribution is right-skewed.

(d) The mean and median are both greater than 5 minutes. The distribution is right-skewed,
meaning that there are some unusually high values. Further, 13 of the 15 bank customers sampled
(or 86.7%) had waiting times greater than 5 minutes. So the customer is likely to experience a
waiting time in excess of 5 minutes. The manager overstated the bank's service record in
responding that the customer would almost certainly not wait longer than 5 minutes for service.
Problem 2
Using the three-year return percentage variable in Excel sheet.

a) Construct a table that computes the mean for each type, risk and rating

b) Construct a table that computes the standard deviation for each type, risk, and rating.

c) What conclusions can you reach concerning differences among the types of retirement
funds (growth and value), based on the risk (low, average and high) and the rating (one,
two, three, four and five)?
Solution
The mean three-year return of the average-risk or low-risk growth funds is generally higher
than that of the value funds. The mean of the high-risk growth funds is higher than the value
funds only for those with two-star or three-star ratings. The standard deviation of the three-
year return of the growth funds is generally higher than that of the value funds across the
various risk levels and star ratings with the exception of the four-star, high-risk, two-star, three-
star or four star low-risk funds.
Problem 3
The data below represents the battery life (in shots) for three pixel digital cameras:

300 180 85 170 380 460

260 35 380 120 110 240

a. Compute the mean, median, first quartile, and third quartile.

b. Compute the variance, standard deviation, range, interquartile range, coefficient of variation,
and Z scores. Are there any outliers? Explain.

c. Are the data skewed? If so, how?

d. Based on the results of (a) through (c), what conclusions can you reach concerning the battery
life (in shots) for three pixel digital cameras?
Solution
(a) Mean = 226.67, median = 210, first quartile = 112.5, third quartile = 360.

(b) Variance = 17756.06, standard deviation = 133.25, range = 425, interquartile range = 247.5,
CV = 58.79%. There is no outlier because none of the Z scores has an absolute value that is
greater than 3.0.

(c) The data appear to be skewed to the right because the mean is greater than the median.
Problem 4
A bank branch located in a commercial district of a city has developed an improved process for serving
customers during the noon-to-1:00 p.m. lunch period. The waiting time, in minutes (defined as the time the
customer enters the line to when he or she reaches the teller window), of a sample of 15 customers during this
hour is recorded over a period of one week. The results are contained in the list below:
4.21 5.55 3.02 5.13 4.77 2.34 3.54 3.20 4.50 6.10 0.38 5.12
6.46 6.19 3.79
Another branch, located in a residential area, is also concerned with the noon-to-1 p.m. lunch hour. The
waiting time, in minutes (defined as the time the customer enters the line to when he or she reaches the teller
window), of a sample of 15 customers during this hour is recorded over a period of one week. The results are
listed below:
9.66 5.90 8.02 5.79 8.73 3.82 8.01 8.35 10.49 6.68 5.64 4.08
6.17 9.91 5.47
a. List the five-number summaries of the waiting times at the two bank branches.
b. Construct box-and-whisker plots and describe the shape of the distribution of each for the two bank
branches.
c. What similarities and differences are there in the distributions of the waiting time at the two bank
branches?
Solution
(a) Commercial district five-number summary: 0.38 3.2 4.5 5.55 6.46.

Residential area five-number summary: 3.82 5.64 6.68 8.73 10.49.

(b) Commercial district: The distribution is skewed to the left. Residential area: The
distribution is skewed slightly to the right.

(c) The central tendency of the waiting times for the bank branch located in the commercial
district of a city is lower than that of the branch located in the residential area. There are a few
longer than normal waiting times for the branch located in the residential area whereas there
are a few exceptionally short waiting times for the branch located in the commercial area.
Problem 6
In a country, savings banks are permitted to sell a form of life insurance called savings bank life
insurance (SBLI). The approval process consists of underwriting, which includes a review of the
application, a medical information bureau check, possible requests for additional medical
information and medical exams, and a policy compilation stage during which the policy pages are
generated and sent to the bank for delivery. The ability to deliver approved policies to customers in
a timely manner is critical to the profitability of this service to the bank. During a period of one
month, a random sample of 27 approved policies was selected, and the following total processing
times in days, were recorded;
73 19 16 64 28 28 31 90 60 56 31 56 22 18
45 48 17 17 17 91 92 63 50 51 69 16 17

a. Compute the mean, median, first quartile, and third quartile.

b. Compute the range, interquartile range, variance, standard deviation, and coefficient of variation.
c. Construct a box-and-whisker plot. Are the data skewed? If so, how?
d. What would you tell a customer who enters the bank to purchase this type of insurance policy and asks how
long the approval process takes?
Solution
(a) Mean = 43.89, median = 45, 1st quartile = 18, 3rd quartile = 63.

(b) Range = 76, interquartile range = 45, variance = 639.2564, standard deviation = 25.28, CV =
57.61%.

(c) The distribution is skewed to the right because there are a few policies that require an
exceptionally long period to be approved.

(d) The mean approval process takes 43.89 days, with 50% of the policies being approved in
less than 45 days. 50% of the applications are approved in between 18 and 63 days. About 67%
of the applications are approved in between 18.6 and 69.2 days.
Problem 7
A manufacturing company produces steel housings for electrical equipment. The main component
part of the housing is a steel trough that is made out of a 14-gauge steel coil. It is produced using a
250-ton progressive punch press with a wipe-down operation, putting two 90-degree forms in the
flat steel to make the trough. The distance from one side of the form to the other is critical because
of weatherproofing in outdoor applications. The company requires that the width of the trough be
between 8.31 inches and 8.61 inches. The data file trough.xls contains the widths of the troughs, in
inches, for a sample of n = 49
a. Calculate the mean, median, range, and standard deviation for the width. Interpret these
measures of central tendency and variability.
b. List the five-number summary.
c. Construct a box-and-whisker plot and describe its shape.
d. What can you conclude about the number of troughs that will meet the company s requirement
of troughs being between 8.31 and 8.61 inches wide?
Solution
(a) Mean = 8.421, median = 8.42, range = 0.186, S = 0.0461. The mean and median width are
both 8.42 inches. The range of the widths is 0.186 inches, and the average scatter around the
mean is 0.0461 inches.
(b) 8.312, 8.404, 8.42, 8.459, 8.498.
(c) Even though mean = median, the left whisker is slightly longer so the distribution is slightly
left-skewed.
(d) All the troughs in this sample meet the specifications.
Problem 7
The manufacturer of Boston and Vermont asphalt shingles provides its customers with a 20-year
warranty on most of its products. To determine whether a shingle will last as long as the warranty
period, accelerated-life testing is conducted at the manufacturing plant. Accelerated-life testing
exposes the shingle to the stresses it would be subject to in a lifetime of normal use in a laboratory
setting via an experiment that takes only a few minutes to conduct. In this test, a shingle is
repeatedly scraped with a brush for a short period of time, and the shingle granules removed by
the brushing are weighed (in grams). Shingles that experience low amounts of granule loss are
expected to last longer in normal use than shingles that experience high amounts of granule loss. In
this situation, a shingle should experience no more than 0.8 gram of granule loss if it is expected to
last the length of the warranty period. The data contains a sample of 170 measurements made on
the company’s Boston shingles and 140 measurements made on Vermont shingles.
a. List the five-number summary for the Boston shingles and for the Vermont shingles.
b. Construct side-by-side box-and-whisker plots for the two brands of shingles and describe the
shapes of the distributions.
c. Comment on the shingles ability to achieve a granule loss of 0.8 gram or less.
Solution
(a) Boston: 0.04, 0.17, 0.23, 0.32, 0.98; Vermont: 0.02, 0.13, 0.20, 0.28, 0.83.
(b) Both distributions are right-skewed.
(c) Both sets of shingles did quite well in achieving a granule loss of 0.8 grams or less.
The Boston shingles had only two data points greater than 0.8 grams. The next highest to these was 0.6 grams.
These two data points can be considered outliers. Only 1.176% of the shingles failed the specification.
In the Vermont shingles, only one data point was greater than 0.8 grams. The next highest was 0.58 grams.
Thus, only 0.714% of the shingles failed to meet the specification.