Statistical Methods For Decision Making

Statistical Methods for Decision Making
Assessment I
Part A (5x2=10)
1. State Bayes' theorem.
2. The Mean of a Binomial distributions is 20 and standard deviation is 4. Find
the parameters of the distribution.
3. Distinguish between population and sample.
4. State central limit theorem.
5. What do you mean by level of significance?
Part B (1x8=8)
6. a) (i) A random variable X has the following probability distribution
X: -2 -1 0 1 2 3
P(x): 0.1 k 0.2 2k 0.3 k
Find (1) the value of 'k' (2) P(X < 1) and P(-1 < X − 2) (3) Evaluate mean of
X.
(ii) It is known that the probability of an item produced by a certain machine
will be defective is 0.05. If the produced items are sent to the market in
packets of 20,find the number of packets containing atleast exactly, atmost 2
defectives in a consignment of 1000 packets using Poisson.
(Or)
6. b) Hupper Corporation produces many types of soft drinks, including
Orange Cola. The filling machines are adjusted to pour 12 ounces of soda
into each 12-ounce can of Orange Cola. However, the actual amount of soda
poured into each can is not exactly 12 ounces; it varies from can to can. It
has been observed that the net amount of soda in such a can has a normal
distribution with a mean of 12 ounces and a standard deviation of 0.015
ounce. (i) What is the probability that a randomly selected can of Orange
Cola contains 11.97 to 11.99 ounces of soda? (ii) What percentage of the
Orange Cola cans contain 12.02 to 12.07 ounces of soda?
Part C (2x16=32)
7. a) In a bolt factory machines A, B and C manufacture respectively 25%,
35% and 40% of the total. Of their output, 5%, 4% and 2% are defective
bolts. A bolt is drawn at random and found to be defective. What is the
probability that it was manufactured by machine C?
(Or)
7. b) According to a survey conducted by Pew Research Center in June 2009,
44% of people aged 18 to 29 years said that religion is very important to them.
Suppose this result is based on a sample of 1000 people aged 18 to 29 years. (i)
What is the point estimate of the corresponding population proportion? (ii) What is
the margin of error at 99% confidence level. (iii) Find, with a 99% confidence
level, the percentage of all people aged 18 to 29 years who will say that religion is
very important to them.
8. a) A publishing company has just published a new college textbook. Before

the company decides the price at which to sell this textbook, it wants to
know the average price of all such textbooks in the market. The research
department at the company took a sample of 36 comparable textbooks and
collected information on their prices. This information produced a mean
price of Rs.145 for this sample. It is known that the standard deviation of the
prices of all such textbooks is Rs.35 and the population of such prices is
normal. (i) What is the point estimate of the mean price of all such college
textbooks? (i) What is the margin of error at 90% confidence interval. (iii)
Construct a 90% confidence interval for the mean price of all such college
textbooks.
(Or)
8. b) (i)A multiple choice test has several hundred questions. Each question has
4 possible answers of them only one is correct. A student attending the test
knows answers to 80% of the questions. He answered all questions. If a
question answered by the student selected at random and found to be correct,
what is the probability that he answered that question by mere guessing?
(ii) The peak temperature T, as measured in degrees Fahrenheit, on a particular
day is the normal random variable with mean 85 and standard deviation 10.
What is P (T>100) and P(T < 60).
Statistical Methods for Decision Making
Assessment II
Part A (5x2=10)
1. Write about F test.
2. What are the advantages and disadvantages of non-parametric tests?
3. What is a run? Give example.
4. Give the range for coefficient of correlation and discuss about its extreme
values.
5. Explain irregular variations in time series analysis.
Part B (1x8=8)
6. a) Find the coefficient of correlation and obtain the lines of regression from
the data given below
X: 50 55 50 60 65 65 65 60 60 50
Y: 11 14 13 16 16 15 15 14 13 13
(Or)
6. b) Fit a straight line trend for the following data by the method of least
squares and estimate the production of 2010. Also, calculate trend values for
each. year.
Year 2003 2004 2005 2006 2007
Sales (in units) 70 74 80 86 90
Part C (2x16=32)
7. a) The following table gives indices of industrial production and the number
of unemployed people in a state in lakhs. Check whether industrial
production and the number of unemployed people are related by computing
the correlation coefficient.
Index of Production: 100 102 105 107 105 112 103 99
Number Unemployed: 15 12 13 11 12 12 19 26
(Or)
7. b) Find the line of best fit for the following data. AD indicates cost of
advertisement and SR indicates Sales Revenue. Calculate the error of
estimate.
AD 21 22 23 24 22 20 20 21 22 25
SR 115 125 120 133 142 150 155 135 125 120
8. a) Connie Rodrigues, the Dean at Midstate College is wondering about the

Business School are about 0.25 lower than those in college of Arts and
school. She has heard that the GPAs in Science. A quick random sampling
produced the following GPAs.
Business 2.86 2.77 3.18 2.8 3.14 2.87 3.19 3.24
Arts and Science 3.35 3.32 3.36 3.63 3.41 3.37 3.45 3.43
Business 2.91 3 2.83
Arts and Science 3.44 3.17 3.26 3.18 3.41
Assuming that the corresponding populations are normally distributed, do
these data indicate that there is a factual basis for the grumblings? State and
test the appropriate hypothesis at 98% confidence level.
(Or)
8. b) A brand manager is concerned that her brand’s share may be unevenly
distributed throughout the country. In a survey in which the country was
divided into 4 geographic regions, a random sampling of 100 consumers in
each region was surveyed with the following results. In the North East
region, 40 purchased the brand and the rest did not purchase. In the North
West region, 55 purchased the brand and the rest did not purchase. In the
South East region, 45 purchased the brand and the rest did not purchase. In
the South West region, 50 purchased the brand and the rest did not purchase.
At α = 0.05, Use Chi Square test to check whether the brand share is the
same across the four regions.

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Statistical Methods for Decision Making

8. a) A publishing company has just published a new college textbook. Before

8. a) Connie Rodrigues, the Dean at Midstate College is wondering about the

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