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    Assignment-4 5-QM-715

    Uploaded by

    Aqeela munir
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    of 3

    Assignment-4

    QM-715

    The McMillanNewspaper Company sometimes makes printing errors in its advertising and is forced to

    provide corrected advertising in the next issue of the paper. The managing editor has done a study of
    this problem and found the following data:

    No. of Errors (x) Relative Frequency

    0 0.56

    1 0.21

    2 0.13

    3 0.07

    4 0.03

    a. Using the relative frequencies as probabilities, what is the expected number of errors? Interpret what
    this value means to the managing editor.

    b. Compute the variance and standard deviation for the number of errors and explain what these values

    measure.

    2- The Ziteck Corporation buys parts from international suppliers. One part is currently being purchased
    from a Malaysian supplier under a contract that calls for at most 5% of the 10,000 parts to be defective.
    When a shipment arrives, Ziteck randomly samples 20 parts.

    Construct probability distribution for the above problem in EXCEL by defining n, p, q=1-p and Binomial
    variable X and considering the following cases
    If it finds 2 or fewer defectives in the sample, it keeps the shipment; otherwise, it returns the entire
    shipment to the supplier.

    a. Assuming that the conditions for the binomial distribution are satisfied, what is the probability that

    the sample will lead Ziteck to keep the shipment if the defect rate is actually 0.05?

    b. Suppose the supplier is actually sending Ziteck 10% defects. What is the probability that the sample
    will lead Ziteck to accept the shipment anyway?

    c- Present graphically the above probability distribution and comment on the shape of the data.

    3- Let there be the following information available for Binomial Random variable Y:

    Case No n p
    1 500 0.3
    2 500 0.8
    3 500 0.5

    Represent the above three cases graphically and comment on the shape of the distribution.
    Assignment-5

    1- Starting in 2008 an increasing number of people found themselves facing mortgages that were worth
    more than the value of their homes. A fund manager who had invested in debt obligations involving
    grouped mortgages was interested in determining the group most likely to default on their mortgage. He
    speculates that older people are less likely to default on their mortgage and thinks the average age of
    those who do is 55 years. To test this, a random sample of 30 who had defaulted was selected; the
    following sample data reflect the ages of the sampled individuals:

    Ages in Years
    40 55 78 27 55 33
    51 76 54 67 40 31
    60 61 50 42 78 80
    25 38 74 46 48 57
    30 65 80 26 46 49

    a- State the appropriate Research hypotheses.


    b. Use the test statistic and p-value approach (in SPSS) to test the null hypothesis with α =0.01 and 0.05.
    c- What FINAL conclusions are achieved from this survey? Explain in detail.
    d- Check the Assumptions as discussed in class lecture and see if any Transformation needed.

    2- The National Club Association does periodic studies on issues important to its membership. The 2008
    Executive Summary of the Club Managers Association of America reported that the average country club
    initiation fee was $31,912. Suppose a random sample taken in 2009 of 12 country clubs produced the
    following initiation fees:

    $29,121 $31,472 $28,054 $31,005 $36,295 $32,771


    $26,205 $33,299 $25,602 $33,726 $39,731 $27,816

    a- Based on the sample information, using SPSS, can you conclude at the α=0.05 level of significance
    that the average
    2009 country club initiation fees are lower than the 2008 average? Conduct your test at the α =0.05
    level of significance.
    b- Estimate the true average value of club fee with 95% confidence level.
    c- Check Assumptions
    d-Interpret all results in detail.

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