Statistics

OSTA – WS 2024
Dr. Omer CAYIRLI

Tutorial Session I
1
Exercises
variables
➢ Table 1.7 shows data for eight
phones. The Overall Score, a
measure of the overall quality for
the phone, ranges from 0 to 100.
➢ Voice Quality has possible ratings
of poor, fair, good, very good, and
excellent.
➢ Talk Time is the manufacturer’s
claim of how long the phone can be
used when it is fully charged.

❖ How many elements are in this data set?

❖ Which variables are categorical and which variables are quantitative?
❖ What scale of measurement is used for each variable?
❖ What is the average price for the phones?
❖ What is the average talk time for the phones?
❖ What percentage of the phones have a voice quality of excellent?
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Exercises
➢ Overall score—awarded based on a
variety of measures.
➢ Recommended—Consumer Reports
recommends the vehicle or not.
➢ Owner satisfaction—satisfaction on a
five-point scale based on the percentage
of owners who would purchase the
vehicle again (– –, –, 0, +, ++).
➢ Overall miles per gallon—miles per gallon
achieved in a 150-mile test trip.
➢ Acceleration (0–60 sec)—time in seconds
it takes vehicle to reach 60 miles per hour
from a standstill with the engine idling.

❖ How many variables are in the data set?

❖ Which of the variables are categorical, and which are quantitative?
❖ What percentage of these 15 vehicles are recommended?
❖ What is the average of the overall miles per gallon across all 15 vehicles?
❖ For owner satisfaction, construct a bar chart similar to Figure 1.4.
❖ Show the frequency distribution for acceleration using the following intervals: 7.0–7.9, 8.0–8.9, 9.0–9.9, and 10.0–10.9.
Construct a histogram
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Exercises

❖ Chapter 2-Case Problem 2: Movie Theater Releases

➢ Use the tabular and graphical methods of descriptive statistics to
learn how these variables contribute to the success of a motion
picture. Include the following in your report.
1. Tabular and graphical summaries for each of the four variables along with a
discussion of what each summary tells us about the movies that are released
to theaters.
2. A scatter diagram to explore the relationship between Total Gross Sales and
Opening Weekend Gross Sales. Discuss.
3. A scatter diagram to explore the relationship between Total Gross Sales and
Number of Theaters. Discuss.
4. A scatter diagram to explore the relationship between Total Gross Sales and
Number of Weeks in Release. Discuss.
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Exercises

❖ Americans tend to dine out multiple times per week. The number of times a
sample of 20 families dined out last week provides the following data.
6 1 5 3 7 3 0 3 1 3

4 1 2 4 1 0 5 6 3 1
a. Compute the mean and median.
b. Compute the first and third quartiles.
c. Compute the range and interquartile range.
d. Compute the variance and standard deviation.
e. The skewness measure for these data is .34. Comment on the shape of this
distribution. Is it the shape you would expect? Why or why not?
f. Do the data contain outliers?
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Exercises
❖ The average waiting time for a patient at an El Paso physician’s office is just over 29 minutes,
well above the national average of 21 minutes.
❖ In order to address the issue of long patient wait times, some physician’s offices are using
wait tracking systems to notify patients of expected wait times.
❖ Patients can adjust their arrival times based on this information and spend less time in
waiting rooms.
❖ The data show wait times (minutes) for a sample of patients at offices that do not have an
office tracking system and wait times for a sample of patients at offices with an office
tracking system.

a. What are the mean and median patient wait times for offices with a wait tracking system? What are the mean and
median patient wait times for offices without a wait tracking system?
b. What are the variance and standard deviation of patient wait times for offices with a wait tracking system? What
are the variance and standard deviation of patient wait times for visits to offices without a wait tracking system?
c. Do offices with a wait tracking system have shorter patient wait times than offices without a wait tracking system?
Explain.
d. Considering only offices without a wait tracking system, what is the z-score for the tenth patient in the sample?
e. Considering only offices with a wait tracking system, what is the z-score for the sixth patient in the sample? How
does this z-score compare with the z-score you calculated for part (d)?
f. Based on z-scores, do the data for offices without a wait tracking system contain any outliers? Based on z-scores,
do the data for offices with a wait tracking system contain any outliers?
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Exercises

❖ Chapter 3-Case Problem 2: Movie Theater Releases

➢ Use the numerical methods of descriptive statistics presented in this
chapter to learn how these variables contribute to the success of a
movie. Include the following in your report:
1.Descriptive statistics for each of the four variables along with a
discussion of what the descriptive statistics tell us about the movie
industry.
2.What movies, if any, should be considered high-performance
outliers? Explain.
3.Descriptive statistics showing the relationship between total gross
sales and each of the other variables. Discuss.
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Exercises

❖ Chapter 3-Case Problem 3: Business Schools of Asia - Pacific

➢ Use the methods of descriptive statistics to summarize the data in Table 3.11. Discuss your
findings.
1. Include a summary for each variable in the data set. Make comments and interpretations
based on maximums and minimums, as well as the appropriate means and proportions. What
new insights do these descriptive statistics provide concerning Asia-Pacific business schools?
2. Summarize the data to compare the following:
a. Any difference between local and foreign tuition costs.
b. Any difference between mean starting salaries for schools requiring and not requiring work
experience.
c. Any difference between starting salaries for schools requiring and not requiring English
tests.
3. Do starting salaries appear to be related to tuition?
4. Present any additional graphical and numerical summaries that will be beneficial in
communicating the data in Table 3.11 to others.
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Exercises

❖ Chapter 3-Case Problem 5: African Elephant Populations

➢ Use methods of descriptive statistics to summarize the data and comment on
changes in elephant populations in African nations since 1979. At a minimum
your report should include the following.
1. The mean annual change in elephant population for each country in the 10 years from
1979 to 1989, and a discussion of which countries saw the largest changes in elephant
population over this 10-year period.
2. The mean annual change in elephant population for each country from 1989 to 2007, and
a discussion of which countries saw the largest changes in elephant population over this
18-year period.
3. The mean annual change in elephant population for each country from 2007 to 2012, and
a discussion of which countries saw the largest changes in elephant population over this
5-year period.
4. A comparison of your results from parts 1, 2, and 3, and a discussion of the conclusions
you can draw from this comparison.
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Exercises

❖Code Churn is a common metric used to

measure the efficiency and productivity of
software engineers and computer programmers.
It’s usually measured as the percentage of a
programmer’s code that must be edited over a
short period of time. Programmers with higher
rates of code churn must rewrite code more often
because of errors and inefficient programming
techniques. The following table displays sample
information for 10 computer programmers.

a. Use the data in the table above and the relative frequency method to determine probabilities that a randomly
selected line of code will need to be edited for each programmer.
b. If you randomly select a line of code from Liwei, what is the probability that the line of code will require editing?
c. If you randomly select a line of code from Sherae, what is the probability that the line of code will not require
editing?
d. Which programmer has the lowest probability of a randomly selected line of code requiring editing? Which
programmer has the highest probability of a randomly selected line of code requiring editing?
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Exercises

❖Suppose that the following table represents a sample

of 944 teenagers’ responses to the question, “When do
you think you will become financially independent?”
❖Consider the experiment of randomly selecting a
teenager from the population of teenagers aged 14 to
18.
a. Compute the probability of being financially independent for each of the four age
categories.
b. What is the probability of being financially independent before the age of 25?
c. What is the probability of being financially independent after the age of 24?
d. Do the probabilities suggest that the teenagers may be somewhat unrealistic in their
expectations about when they will become financially independent?

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Exercises

❖High school seniors with strong academic records apply to the nation’s most selective colleges in
greater numbers each year. Because the number of slots remains relatively stable, some colleges reject
more early applicants.
❖Suppose that for a recent admissions class, an Ivy League college received 2851 applications for early
admission. Of this group, it admitted 1033 students early, rejected 854 outright, and deferred 964 to the
regular admission pool for further consideration.
❖In the past, this school has admitted 18% of the deferred early admission applicants during the regular
admission process.
❖Counting the students admitted early and the students admitted during the regular admission process,
the total class size was 2375.
❖Let E, R, and D represent the events that a student who applies for early admission is admitted early,
rejected outright, or deferred to the regular admissions pool.
a. Use the data to estimate P(E), P(R), and P(D).
b. Are events E and D mutually exclusive? Find P(E ∩ D).
c. For the 2375 students who were admitted, what is the probability that a randomly selected student was
accepted during early admission?
d. Suppose a student applies for early admission. What is the probability that the student will be admitted for
early admission or be deferred and later admitted during the regular admission process?
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Exercises

❖To better understand how husbands and wives feel about their finances, Money magazine conducted a
national poll of 1010 married adults age 25 and older with household incomes of $50,000 or more.
❖Consider the following example set of responses to the question, “Who is better at getting deals?”

a. Develop a joint probability table and use it to answer the following questions.
b. Construct the marginal probabilities for Who Is Better (I Am, My Spouse, We Are Equal). Comment.
c. Given that the respondent is a husband, what is the probability that he feels he is better at getting deals than his
wife?
d. Given that the respondent is a wife, what is the probability that she feels she is better at getting deals than her
husband?
e. Given a response “My spouse” is better at getting deals, what is the probability that the response came from a
husband?
f. Given a response “We are equal,” what is the probability that the response came from a husband? What is the
probability that the response came from a wife? 13
Exercises

❖The prior probabilities for events A1 and A2 are P(A1) = .40 and P(A2) = .60. It is
also known that P(A1 ∩ A2) = 0. Suppose P(B ∣ A1) = .20 and P(B ∣ A2) = .05.
a.Are A1 and A2 mutually exclusive? Explain.
b.Compute P(A1 ∩ B) and P(A2 ∩ B).
c.Compute P(B).
d.Apply Bayes’ theorem to compute P(A1 ∣ B) and P(A2 ∣ B).

❖ The prior probabilities for events A1, A2, and A3 are P(A1) = .20, P(A2) = .50, and
P(A3) = .30. The conditional probabilities of event B given A1, A2, and A3 are P(B ∣
A1) = .50, P(B ∣ A2) = .40, and P(B ∣ A3) = .30.
a.Compute P(B ∩ A1), P(B ∩ A2), and P(B ∩ A3).
b.Apply Bayes’ theorem, to compute the posterior probability P(A2 ∣ B).
c.Use the tabular approach to applying Bayes’ theorem to compute P(1 ∣ B), P(A2 ∣ B), and P(A3 ∣ B).
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Exercises

❖A consulting firm submitted a bid for a large research project. The firm’s management initially felt they
had a 50–50 chance of getting the project. However, the agency to which the bid was submitted
subsequently requested additional information on the bid. Past experience indicates that for 75% of the
successful bids and 40% of the unsuccessful bids the agency requested additional information.
a. What is the prior probability of the bid being successful (that is, prior to the request for additional information)?
b. What is the conditional probability of a request for additional information given that the bid will ultimately be
successful?
c. Compute the posterior probability that the bid will be successful given a request for additional information.
❖A local bank reviewed its credit card policy with the intention of recalling some of its credit cards. In the
past approximately 5% of cardholders defaulted, leaving the bank unable to collect the outstanding
balance. Hence, management established a prior probability of .05 that any particular cardholder will
default. The bank also found that the probability of missing a monthly payment is .20 for customers who
do not default. Of course, the probability of missing a monthly payment for those who default is 1.
a. Given that a customer missed one or more monthly payments, compute the posterior probability that the
customer will default.
b. The bank would like to recall its card if the probability that a customer will default is greater than .20. Should the
bank recall its card if the customer misses a monthly payment? Why or why not?
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Exercises

❖ Chapter 4-Case Problem 1: Hamilton County Judges

➢ Prepare a report with your rankings of the judges. Also, include an
analysis of the likelihood of appeal and case reversal in the three
courts. At a minimum, your report should include the following:
1. The probability of cases being appealed and reversed in the three
different courts.
2. The probability of a case being appealed for each judge.
3. The probability of a case being reversed for each judge.
4. The probability of reversal given an appeal for each judge.
5. Rank the judges within each court. State the criteria you used and
provide a rationale for your choice.
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Exercises

❖Chapter 4-Case Problem 2: Rob’s Market (RM)

➢ Prepare a report that gives insight into the purchase behavior of customers who use the RM loyalty
card. At a minimum your report should include estimates of the following:
1. The probability that a random customer does not purchase any of the three products (bread, jelly, or peanut butter).
2. The probability that a random customer purchases white bread.
3. The probability that a random customer purchases wheat bread.
4. The probability that a random customer purchases grape jelly given that he or she purchases white bread.
5. The probability that a random customer purchases strawberry jelly given that he or she purchases white bread.
6. The probability that a random customer purchases creamy peanut butter given that he or she purchases white
bread.
7. The probability that a random customer purchases natural peanut butter given that he or she purchases white
bread.
8. The probability that a random customer purchases creamy peanut butter given that he or she purchases wheat
bread.
9. The probability that a random customer purchases natural peanut butter given that he or she purchases wheat
bread.
10.The probability that a random customer purchases white bread, grape jelly, and creamy peanut butter. 17
What is next?

❖Discrete Probability Distributions I

➢ Random Variables
➢ Developing Discrete Probability Distributions
➢ Expected Value and Variance
➢ Bivariate Distributions, Covariance, and Financial Portfolios
➢ Reading(s):
✓ SBE Ch. 5.1 → 5.4

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Statistics
OSTA – WS 2024
Dr. Omer CAYIRLI

Tutorial Session I
19