Solution to Problems

Problem 1: Binomial Distribution

Given:
• Number of people (n) = 5
• Probability of a person living for 30 years or more (p) = 2/3
This is a binomial distribution problem where X ~ B(n=5, p=2/3).
1. Probability that all five people are still living (P(X=5))
Using the binomial probability formula P(X=k) = C(n, k) * p^k * (1-p)^(n-k):
P(X=5) = C(5, 5) * (2/3)^5 * (1/3)^0
P(X=5) = 1 * (0.131687) * 1 = 0.131687
2. Probability that at least three people are still living (P(X≥3))
P(X≥3) = P(X=3) + P(X=4) + P(X=5)
P(X=3) = C(5, 3) * (2/3)^3 * (1/3)^2
P(X=4) = C(5, 4) * (2/3)^4 * (1/3)^1
P(X=3) = 10 * (8/27) * (1/9) = 0.329218
P(X=4) = 5 * (16/81) * (1/3) = 0.329218
P(X≥3) = 0.329218 + 0.329218 + 0.131687 = 0.790123
3. Probability that exactly two people are still living (P(X=2))
P(X=2) = C(5, 2) * (2/3)^2 * (1/3)^3
P(X=2) = 10 * (4/9) * (1/27) = 0.164609
4. Mean, Variance, and Standard Deviation of X
For a binomial distribution X ~ B(n, p):
• Mean (μ) = n * p
• Variance (σ²) = n * p * (1 - p)
• Standard Deviation (σ) = sqrt(n * p * (1 - p))
Given n = 5 and p = 2/3:
Mean = 5 * (2/3)
Mean = 3.333
Variance = 5 * (2/3) * (1 - 2/3)
Variance = 1.111
Standard Deviation = sqrt(1.111)
Standard Deviation = 1.054
Problem 2: Poisson Distribution
Given:
• X is the number of flaws on the surface of a randomly selected boiler.
• X has a Poisson distribution with mean (λ) = 5.
a. P(X ≤ 8)
P(X ≤ 8) = P(X=0) + P(X=1) + ... + P(X=8)
Alternatively, using the cumulative distribution function (CDF) or a Poisson table if available
for λ=5. Since a Poisson table is mentioned in the problem, I will assume I can use it.
However, the provided table only goes up to λ=2.0. Therefore, I will calculate it using the
formula.
P(X ≤ 8) = 0.9319
b. P(X = 8)
Using the Poisson probability mass function P(X=k) = (λ^k * e^(-λ)) / k!:
P(X=8) = (5^8 * e^(-5)) / 8!
P(X = 8) = 0.0653
c. P(9 ≥ X) = P(X ≤ 9)
P(X ≤ 9) = P(X=0) + P(X=1) + ... + P(X=9)
P(X ≤ 9) = 0.9682
d. P(5 ≤ X ≤ 8)
P(5 ≤ X ≤ 8) = P(X=5) + P(X=6) + P(X=7) + P(X=8)
P(X=5) = 0.1755
P(X=6) = 0.1462
P(X=7) = 0.1044
P(X=8) = 0.0653
P(5 ≤ X ≤ 8) = 0.1755 + 0.1462 + 0.1044 + 0.0653 = 0.4914
e. P(5 < X < 8)
P(5 < X < 8) = P(X=6) + P(X=7)
P(5 < X < 8) = 0.1462 + 0.1044 = 0.2506
f. Mean, Variance, and Standard Deviation of X
For a Poisson distribution, the mean, variance, and standard deviation are all derived from
the parameter λ.
Given λ = 5:
Mean (μ) = λ = 5
Variance (σ²) = λ = 5
Standard Deviation (σ) = sqrt(λ) = sqrt(5)
Standard Deviation = 2.236
Problem 3: Normal Distribution
Given:
• Mean (μ) = 8.8 inches
• Standard Deviation (σ) = 2.7 inches
a. Probability that the diameter of a tree selected at random will be
at least 10 inches (P(X ≥ 10))
First, standardize X to Z using the formula Z = (X - μ) / σ:
Z = (10 - 8.8) / 2.7 = 1.2 / 2.7 = 0.444
P(X ≥ 10) = P(Z ≥ 0.444)
Using the standard normal table (or calculator), P(Z ≥ 0.44) = 1 - P(Z < 0.44).
P(Z < 0.444) = 0.6715
P(X ≥ 10) = 1 - 0.6715 = 0.3285
b. Probability that the diameter of a tree selected at random exceeds
20 inches (P(X > 20))
First, standardize X to Z:
Z = (20 - 8.8) / 2.7 = 11.2 / 2.7 = 4.148
P(X > 20) = P(Z > 4.148)
Using the standard normal table (or calculator), P(Z > 4.148) = 1 - P(Z ≤ 4.148).
P(Z ≤ 4.148) = 0.999983
P(X > 20) = 1 - 0.999983 = 0.000017
c. Probability that the diameter of a tree selected at random will be
between 5 and 10 inches (P(5 < X < 10))
First, standardize both values to Z-scores:
For X = 5: Z1 = (5 - 8.8) / 2.7 = -3.8 / 2.7 = -1.407
For X = 10: Z2 = (10 - 8.8) / 2.7 = 1.2 / 2.7 = 0.444
P(5 < X < 10) = P(-1.407 < Z < 0.444) = P(Z < 0.444) - P(Z < -1.407)
P(Z < 0.444) = 0.6715
P(Z < -1.407) = 0.0797
P(5 < X < 10) = 0.6715 - 0.0797 = 0.5918
Problem 4: Descriptive Statistics and Frequency
Distribution
Given the sorted data and Minitab output:
Sorted Data: 33, 34, 44, 45, 47, 48, 48, 49, 49, 50, 52, 52, 53, 55, 57, 48, 58, 59, 60, 61, 61, 62,
62, 64, 64, 65, 67, 68, 68, 69
(Note: The sorted data provided in the problem has '48' appearing twice in the first half and
then again after '57'. I will assume the sorted data is correct as presented in the Minitab
output, where 48 is Q1 and 56 is Median. The provided sorted data seems to have an error
as 48 appears multiple times and is not fully sorted in the provided list. I will use the
Minitab output for calculations.)
Minitab Output:
Variable N N* Mean SE Mean StDev Minimum Q1 Median Q3 Maximum
C1 30 0 55.07 1.74 9.54 33.00 48.00 56.00 62.50 69.00
1. Compute the following measures
• IQR (Interquartile Range): IQR = Q3 - Q1
From Minitab output: Q1 = 48.00, Q3 = 62.50
IQR = 62.50 - 48.00 = 14.50
• The Variance: Variance = (StDev)^2
From Minitab output: StDev = 9.54
Variance = (9.54)^2
 • The Range of the data set: Range = Maximum - Minimum
From Minitab output: Minimum = 33.00, Maximum = 69.00
Range = 69.00 - 33.00 = 36.00
• The coefficient of variation (CV): CV = (StDev / Mean) * 100%
From Minitab output: StDev = 9.54, Mean = 55.07
CV = (9.54 / 55.07) * 100%
2. What is the shape of the frequency distribution?
To determine the shape of the frequency distribution, we can compare the Mean, Median,
and examine the boxplot.
From Minitab output:
• Mean = 55.07
• Median = 56.00
Since the Median (56.00) is slightly greater than the Mean (55.07), the distribution is likely
slightly negatively (left) skewed.
Looking at the boxplot (though not fully visible in the provided text, the general shape can
be inferred from the quartiles):
• Q1 = 48.00
• Median = 56.00
• Q3 = 62.50
The distance from Q1 to Median (56-48 = 8) is less than the distance from Median to Q3 (62.5-
56 = 6.5). This also suggests a slight left skew, as the upper half of the data is more spread
out than the lower half. However, the difference is small, so it's close to symmetrical.
3. From the boxplot and indication of outlier observations?
Outliers are typically identified as data points that fall outside 1.5 times the IQR below Q1 or
above Q3.
IQR = 14.50
1.5 * IQR = 1.5 * 14.50 = 21.75
Lower Bound for Outliers = Q1 - 1.5 * IQR = 48.00 - 21.75 = 26.25
Upper Bound for Outliers = Q3 + 1.5 * IQR = 62.50 + 21.75 = 84.25
Looking at the Minimum (33.00) and Maximum (69.00) values from the Minitab output, all
data points fall within the calculated bounds (26.25 to 84.25).
Therefore, based on the Minitab summary statistics and the standard IQR method, there are
no indicated outlier observations in the data set.
Problem 5: Confidence Intervals
Part I
Given Minitab descriptive measures for 'defects' (which seems to be a typo and should refer
to 'waiting time' based on the questions):
Variable N N* Mean SE Mean StDev Minimum Q1 Median Q3 Maximum
defects 30 0 8.267 0.532 2.912 2.000 6.000 8.000 10.250 14.000
Assuming the questions refer to the 'waiting time to finish transaction' and the provided
Minitab output for 'defects' is the relevant data for these questions, we will use:
• Sample Mean (x̄) = 8.267
• Sample Standard Error of the Mean (SE Mean) = 0.532
• Sample Size (n) = 30
• Standard Deviation (σ) = 2.912 (although the problem states
the standard deviation is 3 defects, the Minitab output shows 2.912. I will use the Minitab
value for consistency with the provided output.)
1. Give a point estimate of the waiting time to finish transaction and
its standard error.
• Point Estimate of the Mean Waiting Time: The best point estimate for the population
mean (μ) is the sample mean (x̄).
Point Estimate = 8.267
• Standard Error of the Mean: This is directly given in the Minitab output.
Standard Error = 0.532
2. Provide 95% Confidence interval for the mean time to finish
transaction
Since the sample size is n=30 (which is ≥ 30, so we can use Z-distribution or t-distribution,
but given SE Mean, Z-distribution is often used for confidence intervals when population
standard deviation is unknown but sample size is large enough). Given the standard
deviation is stated as 3 defects (population standard deviation, σ) and also a sample
standard deviation of 2.912, I will assume the problem intends for us to use the given
standard error of the mean directly, which is based on the sample standard deviation.
Confidence Interval = Sample Mean ± (Z-score * Standard Error)
For a 95% Confidence Interval, the Z-score is 1.96.
Lower Bound = 8.267 - (1.96 * 0.532)
Upper Bound = 8.267 + (1.96 * 0.532)
95% Confidence Interval = [7.224, 9.310]
3. Give 99% Confidence interval for the mean waiting time.
For a 99% Confidence Interval, the Z-score is 2.576.
Lower Bound = 8.267 - (2.576 * 0.532)
Upper Bound = 8.267 + (2.576 * 0.532)
99% Confidence Interval = [6.897, 9.637]
4. What would happen to the width of the interval by changing the
confidence level from 95% to 99%.
Comparing the two confidence intervals:
• 95% CI: [7.224, 9.310]
• 99% CI: [6.897, 9.637]
Width of 95% CI = 9.310 - 7.224 = 2.086
Width of 99% CI = 9.637 - 6.897 = 2.740
As the confidence level increases from 95% to 99%, the width of the confidence interval
increases. This is because to be more confident that the interval contains the true
population parameter, we need a wider range of values.
Part II
Given:
• P(A) = 0.5 (Probability of purchasing manual can opener)
• P(B) = 0.6 (Probability of purchasing electric can opener)
• P(A U B) = 0.9 (Probability of purchasing at least one of the two)
We know that P(A U B) = P(A) + P(B) - P(A ∩ B).
So, P(A ∩ B) = P(A) + P(B) - P(A U B)
P(A ∩ B) = 0.5 + 0.6 - 0.9 = 1.1 - 0.9 = 0.2
This means the probability of purchasing both a manual and an electric can opener is 0.2.
Venn Diagram:
(A visual representation of the Venn diagram would show two overlapping circles, A and B,
with the intersection A ∩ B = 0.2. The part of A only would be P(A) - P(A ∩ B) = 0.5 - 0.2 = 0.3.
The part of B only would be P(B) - P(A ∩ B) = 0.6 - 0.2 = 0.4. The area outside both circles
would be 1 - P(A U B) = 1 - 0.9 = 0.1)
a. What is the probability that the next purchaser requests a gas
dryer only?
This question seems to be a typo and likely refers to
a 'manual can opener only' or 'electric can opener only'. Assuming it refers to 'manual can
opener only':
P(Manual only) = P(A) - P(A ∩ B) = 0.5 - 0.2 = 0.3
b. What is the probability that the next purchaser will request exactly
one type?
P(Exactly one type) = P(A only) + P(B only)
P(B only) = P(B) - P(A ∩ B) = 0.6 - 0.2 = 0.4
P(Exactly one type) = 0.3 + 0.4 = 0.7
c. What is the probability that the next purchaser will request at most
one type?
P(At most one type) = P(None) + P(Exactly one type)
P(None) = 1 - P(A U B) = 1 - 0.9 = 0.1
P(At most one type) = 0.1 + 0.7 = 0.8
Alternatively, P(At most one type) = 1 - P(Both) = 1 - P(A ∩ B) = 1 - 0.2 = 0.8
d. Are A and B independent?
For A and B to be independent, P(A ∩ B) must equal P(A) * P(B).
P(A ∩ B) = 0.2
P(A) * P(B) = 0.5 * 0.6 = 0.3
Since P(A ∩ B) (0.2) ≠ P(A) * P(B) (0.3), A and B are not independent.
e. Are A and B mutually exclusive?
For A and B to be mutually exclusive, P(A ∩ B) must be 0.
Since P(A ∩ B) = 0.2 ≠ 0, A and B are not mutually exclusive.
Problem 6: Regression Analysis
Given data on X (advertising in thousands of dollars) and Y (sales volume in millions of
dollars), and Minitab Regression Analysis output.
Regression Equation: y = 12.7 + 0.9281 X
1. Assume that X and Y are linearly related, explain the relationship
between X and Y.
The regression equation is given as y = 12.7 + 0.9281 X. This equation describes a positive
linear relationship between X (advertising) and Y (sales volume).
• The intercept (12.7) suggests that when advertising (X) is zero, the sales volume (Y) is
estimated to be 12.7 million dollars. However, in many real-world scenarios,
interpreting the intercept when X=0 might not be practically meaningful if X=0 is outside
the range of observed data.
• The slope (0.9281) indicates that for every one thousand dollar increase in advertising
(X), the sales volume (Y) is estimated to increase by 0.9281 million dollars, on average.
This positive slope confirms that as advertising increases, sales volume tends to
increase.
2. Calculate the correlation coefficient, and explain what it means?
The Minitab output provides R-sq (R-squared) = 93.90%.
The correlation coefficient (r) is the square root of R-squared. Since the relationship is
positive (from the positive slope), r will be positive.
r = sqrt(R-sq) = sqrt(0.9390)
r = 0.9690
Meaning of the correlation coefficient:
The correlation coefficient (r) of 0.9690 indicates a very strong positive linear relationship
between advertising (X) and sales volume (Y). This means that as advertising expenditure
increases, sales volume tends to increase significantly and consistently. The closer r is to 1,
the stronger the positive linear relationship.
3. Is the model efficient? Why?
Efficiency of the model can be assessed by looking at the R-squared value and the P-value
of the regression.
From the Minitab output:
• R-sq = 93.90%
• P-Value for Regression = 0.000
 • R-sq (Coefficient of Determination): An R-sq of 93.90% means that 93.90% of the
variation in sales volume (Y) can be explained by the linear relationship with advertising
(X). This is a very high percentage, indicating that the model explains a large proportion
of the variability in the dependent variable.
• P-Value for Regression: The P-value for the overall regression model is 0.000, which is
much less than any common significance level (e.g., 0.05 or 0.01). This indicates that the
regression model is statistically significant, meaning that the relationship between X
and Y is not due to random chance.
Given the high R-squared value and the highly significant P-value, the model appears to be
efficient in explaining the variation in sales volume based on advertising expenditure.
4. Is the model adequate?
Adequacy of the model involves checking assumptions of linear regression and examining
residuals. While the provided output doesn't give all the necessary information for a full
adequacy check (e.g., residual plots), we can infer some aspects.
• F-Value and P-Value for Regression: The F-value of 169.43 with a P-value of 0.000
strongly suggests that the model is adequate in capturing a significant linear
relationship.
• Residuals: The output shows
an unusual observation for Obs 8 with a Std Resid of 2.00. While this is not extreme
(typically > 3 is considered an outlier), it suggests that for this observation, the model's
prediction might be off by 2 standard deviations of the residual. A thorough check would
involve plotting residuals against predicted values and independent variables to look for
patterns, non-linearity, or heteroscedasticity.
Based on the strong statistical significance (high R-sq and low P-value), the model appears
adequate in describing the relationship, but a full assessment would require examining
residual plots to ensure all assumptions of linear regression are met.
5. Test for the significance of β1, the slope of the line.
To test the significance of β1 (the slope of the line), we look at the Coefficients table in the
Minitab output.
For the term 'X' (which represents β1):
• Coef = 0.9281
• SE Coef = 0.0713
• T-Value = 13.02
 • P-Value = 0.000
Hypotheses:
• Null Hypothesis (H0): β1 = 0 (There is no linear relationship between X and Y)
• Alternative Hypothesis (Ha): β1 ≠ 0 (There is a linear relationship between X and Y)
Test Statistic:
• T-Value = 13.02
P-Value:
• P-Value = 0.000
Conclusion:
Since the P-value (0.000) is much less than any common significance level (e.g., α = 0.05 or α
= 0.01), we reject the null hypothesis. This means there is statistically significant evidence
to conclude that β1 is not equal to zero, and therefore, there is a significant linear
relationship between advertising (X) and sales volume (Y).
6. What does it mean that β1 = 0.928 in the regression equation.
In the regression equation y = 12.7 + 0.9281 X, β1 is the coefficient of X, which is 0.9281.
This value represents the estimated change in the dependent variable (Y, sales volume
in millions of dollars) for a one-unit increase in the independent variable (X,
advertising in thousands of dollars), assuming all other factors are held constant.
Specifically, it means that for every additional one thousand dollars spent on
advertising, the sales volume is estimated to increase by 0.9281 million dollars, on
average. This confirms the positive relationship between advertising and sales, and
quantifies the expected impact of advertising on sales based on this model.