1.
Suppose it is known that the distribution of purchase amounts by customers entering a popular retail store is
approximately normal with mean as $ 25 and standard deviation as $8.
a. What is the probability that a randomly selected customer spends more than $10 at this store?
b. Find the dollar amount such that 75% of all customers spend no more than this amount.
c. What is the probability that a randomly selected customer spends $15 and $35 at this store?
Given:
i) A normal distribution data.
ii) Mean of customer spends is $25
iii) Standard deviation from the mean is $8
Solution:
By Excel Formula
a) Probablity that a randomly selected customer spends more than $10 at the store= 0.9696
z=(10-25)/8
-1.875
From standard z-distribution values table from Ken Black
Area between $10 and $25 = 0.4641
Adding 0.5 gives 0.96 for half symmetry area above the mean value 0.9641
By Excel Formula
b) The dollar amount such that 75% of all customers spend no more than this amount= $30.40
From standard z-distribution values table from Ken Black
Area between mean and 75% value will be 0.25
Match 0.25 area, z value will be approx 0.7
Hence, 0.7=(x-mean)/SD
Amount = $29.4
By Excel Formula
c) Probability that a randomly selected customer spends $15 and $35 at this store= 0.7887005
From standard z-distribution values table from Ken Black
z=(15-25)\8=--1.25~-1.3
Area between mean and 15 is .4032
z=(35-25)/8=1.25~1.3
Area between mean and 35 is .4032
P= 0.8064 Considering area under 1.3 rather than 1.25 hence the difference.
By Excel Formula
By Excel Formula
By Excel Formula
2. The U.S. Bureau of Economic Statistics reports that the average annual salary in the metropolitan
Boston area is $50542. Suppose annual salaries in the metropolitan Boston area are normally
distributed with a standard deviation of $4246. A Boston worker is randomly selected.
a. What is the probability that the worker’s annual salary is more than $ 60000?
b. What is the probability that the worker’s annual salary is less than $ 45000?
c. What is the probability that the worker’s annual salary is between $44000 and $52000?
d. What is the least salary offered to 60% of worker’s?
e. What is the salary offered to top 15% of workers?
Given:
Mean $50542
SD $4246
By Excel Formula
a. Probability that the worker’s annual salary is more than $ 60000 0.01296
From standard z-distribution values table from Ken Black
z=(60000-50542)/4246
2.2
Area of probablity from mean to 60000 is 0.4861
To find more that $60000 = 0.5-0.4861 0.013
By Excel Formula
b. Probability that the worker’s annual salary is less than $ 45000 0.09591
From standard z-distribution values table from Ken Black
z=(45000-50542)/4246
-1.3052285
0.4032
Probablity =0.5-0.4032 0.0968
By Excel Formula
c. Probability that the worker’s annual salary is between $44000 and $52000 0.57265493
d. Least salary offered to 60% of worker’s? $49,466.29
e. Salary offered to top 15% of workers Above $54,942.70
3. The scores on a certain entrance examination of a management institute are known to be approximately normally
distributed with mean =118 and a standard deviation =12.
a. If a candidate obtaining a score of at least 100 is declared successful, then what is the probability that a
candidate chosen at random will be successful?
b. If the institute management desire to pass 70% of those taking the examination what should be the lowest
passing score.
c. Obtain the lowest score of top 30% of the candidates.
Given:
Data is normally distributed
Mean = 118
Standard Deviation = 12
Solution:
a] If a candidate obtaining a score of at least 100 is declared successful, then the probability =
b)If the institute management desire to pass 70% of those taking the examination lowest score should be =
c. lowest score of top 30% of the candidates = 124.3
pproximately normally
bility that a
d be the lowest
By Excel Formula
0.93
e should be = 111.7
4. In preparation of an international sports event, the civic authorities in a certain city install 6000 electric lamps on
the roads. These lamps have normally distributed burning life with an average of 1200 hours with a standard
deviation of 150 hours.
a. What is the number of lamps which might be expected to fail in the first 900 burning hours?
b. What is the number of lamps which might be expected to have lives between 1000 and 1400 hours?
c. After how many hours would you expect that 10%of the lamps would fail?
d. After how many hours would you expect that 10% of the lamps would still be burning?
Given:
Total Lamps = 6000
Data is normally distributed
Average burning Life =1200 hrs
Standard Deviation = 150 hrs
a) Number of lamps might fail in first 900 burning hours =
Probablity = 0.0228
Number of lamps failing in first 900 = 137
b)Number of lamps which might be expected to have lives between 1000 and 1400 hours
Probablity 0.8175776
Number of lamps have lives between 1000 to 1400 hours is = 4905
c) 10%of the lamps would fail in = 1008 hours
d) 10% of lamps still will burning= 1392 hours
lectric lamps on
5. A company has entered into a contract for the construction of a flyover. Time taken by the company to
construct the flyover is estimated to be normally distributed with a mean of 450 days and a standard
deviation of 60 days. The contract stipulates the construction of flyover in 480 days and a penalty of Rs.
10000 for each day spent in excess of that. What is the probability that
a. The company pays a penalty of at least ₹ 200000
b. The company takes at most 600 days to complete the flyover.
Given:
Time taken to construct the flyover is normally distributed.
Mean is 450 days
Standard Deviation is 60 days
a] When company pays a penalty of Rs. 200000
It means days exceed for construction = 200000/10000 = 20 days minimum exceeded.
Hence, total days undertaken for completion shall be 500 or more.
To find the probablity for days taken more than 500 = 0.20
b] Company takes at most 600 days to complete the flyover 0.9938
6. An editor of a large publishing company calculates that it requires 11 months on an average to
complete the publication process from manuscript to finished books with a standard deviation of 2.4
months. She believes that the normal distribution well describes the distribution of publication process.
Out of 20 books she is expected to handle this year.
a. How many books will complete the process in less than a year?
b. What proportion of books will be completed within 6 months?
c. What proportion of books will be completed between 10 months to 14 months?
d. What is the least amount of time required to finish with top 30% of publication work.
e. How many books will complete the publishing process from 12 months to 13.5 months?
Given:
Normal distribution describes the publication process.
Mean = 11 months
Standard Deviation =2.4 months.
a] Proportion of books will be completed in less than a year= 0.66
Number of books completed within a year = 7.938 7
b] Proportion of books will be completed within 6months = 0.02
c] Proportion of books will be completed between 10 months to 14 months = 0.556
d] Least amount of time required to complete top 30% of publication work 9.7 months
e) Proportion of books from 12 months to 13.5 months = 0.19
Number of books completed within this period = 3.79 3
7. Anushree saxena, VP of standard insurance company has developed a new training program that is entirely selfpaced.
New employee’s work various stages at their own pace, completion occurs when the material is learned.
Anushree’s program has been especially effective in speeding up the training process, as an employee’s salary
during training is only 67% of that earned upon completion of the program. In the last several years average
completion time of the program was 44 days, and the standard deviation was 12 days.
a. Find the probability an employee will finish the program in 33 to 42 days.
b. What is the probability of finishing the program in fewer than 30 days?
c. What is the probability of finishing the program in fewer than 25 days or more than 60 days?
Given,
Mean = 44 days
SD = 12 Days
a] Probablity to complete the program in 33 to 42 days is = 0.25
b] Probability of completion of program in less than 30 days= 0.12
c] Probablity of finishing the program more than 60 days = 0.091211
Probablity of finishing the program in fewer than 25 days= 0.056673
Total 0.148
that is entirely selfpaced.
mployee’s salary
years average
8. A study of long distance phone calls made from the corporate offices of Pepsi bottling group Inc, in Gurgaon
revealed the length of the calls, in minutes following the normal distribution. The mean length of time per call was
4.2 minutes and standard deviation was 0.66 minutes
a. What proportion of calls last between 4.2 and 5 minutes?
b. What proportion of calls last more than 5 minutes?
c. What proportion of calls last between 5 and 6 minutes?
d. How much minimum time it took for approximately top 15 % of total call?
Given:
Mean 4.2 mins
SD 0.66 minutes
a] Proportion of calls between 4.2 to 5 minutes = 0.387
b] Proportion of call more than 5 minutes = 0.113
c] Proportion of call between 5 to 6 minutes= 0.110
d] Minium time took for approximately top 15% of total call = 4.9
Inc, in Gurgaon
of time per call was
9. Foreign Banks (Employees more than 500)
Bank Number Business per Return on assets
of employee ( in ₹
Employe lakhs)
es
2005-06 2005-06 2001-02 2005-06 2001-02
ABN Amro 3093 905.82 840.16 1.03 1.72
American Express 1773 239.53 237.22 1.45 0.27
Citi Bank 3250 1607.92 1566.82 3.07 3.60
Deutsche Bank 678 1016.83 986.22 1.04 2.24
Standard 5390 837.29 794.41 2.49 2.03
Chartered
Solution To find descriptive statistics
a] Average business done by per employees of all five foreign banks cumulative
Bank Number Business per Total Growth Return on assets
of employee ( in ₹ Business of
Employe lakhs) done by business
es bank done per
employee
2005-06 2005-06 2001-02 2005-06 2005-06 2001-02
ABN Amro 3093 905.82 840.16 2801701.26 65.66 1.03 1.72
American Express 1773 239.53 237.22 424686.69 2.31 1.45 0.27
Citi Bank 3250 1607.92 1566.82 5225740.00 41.10 3.07 3.60
Deutsche Bank 678 1016.83 986.22 689410.74 30.61 1.04 2.24
Standard 5390 837.29 794.41 4512993.10 42.88 2.49 2.03
Chartered
Total 14184 13654531.79 182.56
Average business done per employee of all bank c 962.67 Lakhs
Average rate of growth done by each employees for all bank = 0.012871 Lakh
10. Surya Bank Pvt. Ltd. Incorporated in first quarter of twentieth century in Varanasi by a group of enterprising
entrepreneurs. The financial results of the bank are given below ( in crores)
Sl. No. Financial Net Total Income Operating
Year Profit Expenses
1 2000 10.24 188.91 35.62
2 2001 5.37 203.28 49.03
3 2002 9.33 240.86 50.97
4 2003 14.92 258.91 97.42
5 2004 17.07 250.07 99.20
6 2005 20.1 204.19 80.72
7 2006 10.39 237.33 86.68
8 2007 16.55 280.64 96.52
9 2008 33.01 361.51 95.23
10 2009 58.17 486.67 114.74
11 2010 23.92 625.94 194.10
12 2011 26.30 610.19 202.14
Total 245.37 1202.37
a. Calculate the average net profit?
b. Calculate the average operating expenses and variation occurred?
c. Calculate the mean, median and standard deviation of the total income
a. Average Net profit = 20.4475 crores
b. Average operating expense = 100.1975 crores
Variation occurred= 2658.377802 crores
c Mean of total income 329.04 crores
Median of total income 254.49 crores
variation of total income 24892.67651 crores
Standard Deviation of total income 157.7741313 crores
f enterprising
