ASSIGNMENT

BUSINESS MATHEMATICS (STA117)

Asadhu Shujaau (000033475)
Faculty of Management & Computing
APRIL 20, 2014
Assignment Business Mathematics (STA117)


Page 1 of 8

1. The following table shows "types of vehicles" that passed Faculty of Management and
Computing in two consecutive mornings during an hour (07:30 to 08:30).

Type of Vehicle
Number of vehicles
Weekdays Weekends
Cars (private) 17 10
Cars (taxi) 53 35
Pick-up trucks 11 15
Motorbikes 289 189
Bikes 35 45
Buses 12 11
Others 40 30


(a) Represent the above information on a bar chart.



0
50
100
150
200
250
300
350
Cars (private) Cars (taxi) Pick-up trucks Motorbikes Bikes Buses Others
N
u
m
b
e
r

o
f

V
e
h
i
c
l
e
s
Type of Vehicle
Weekdays Weekends
Assignment Business Mathematics (STA117)


Page 2 of 8

(b) Explain why a histogram is not suitable to represent the above data.

Histograms are used to represent continuous data. Which means data can take any value in a
given range. However, in this case we are dealing with discrete data. Hence a histogram is not
suitable.

(c) What types of vehicles could belong to others category?

Van
Jeep
Ambulance
Police Vehicles
Excavator
Forklift
Oil Bowser

(d) Since "others" category represents more vehicles than the categories for "pick-up trucks"
and "buses", should there be a further group from the category of "others"? Justify your
answer.

Since the others category contains many types of vehicle, it is possible that it can have a
higher number than some other categories. Dividing others category further can mean that
sometimes the new category might have 0 as its value. Hence, it is not necessary to have another
category.

(5 + 2 + 1 + 2 = 10 marks)

Assignment Business Mathematics (STA117)


Page 3 of 8

2. Case: Cereal Company

A cereal manufacturer has a machine that fills the boxes. Boxes are labelled 16 oz so the
company wants to have that much cereal in each box. But since no packaging process is perfect,
there will be minor variations. If the machine is set at exactly 16 oz and the Normal distribution
applies (or at least the distribution is roughly symmetric), then about half of the boxes will be
underweight, making consumers unhappy and exposing the company to bad publicity and
possible lawsuits. To prevent underweight boxes, the manufacturer has to set the mean a little
higher than 16.0 oz. Based on their experience with the packaging machine; the company
believes that the amount of cereal in the boxes fits a Normal distribution with a standard
deviation of 0.2 oz. The manufacturer decides to set the machine to put an average of 16.3 oz
in each box.

(a) What fraction of the boxes will be underweight? (Total: 10 Marks)
Steps
i. State the variable and the objective. (2)

Variable:
Let A = Weight of Cereal in the box
Objective:
To find the fraction of boxes under 16.0 oz.

ii. Explain whether a Normal distribution is appropriate or not. If appropriate, state the
distribution. (3)

It is stated in the case that there is only small variation in the packaging process. This means
the distribution is roughly symmetric. Hence, normal distribution is appropriate

Assignment Business Mathematics (STA117)


Page 4 of 8

iii. By using an appropriate distribution, and corresponding diagrams to show your working,
find the proportion of boxes that will be underweight. (5)



A~N (16.3, 0.2
2
)
P (A<16)
Let A = 16
Z = (A mean) / standard deviation
Z = (16 16.3) / 0.2
Z = - 0.3 / 0.2
Z = -1.5

P (A<16) = P (z<-1.5)
= 1 P (z<1.5)
= 1 0.9332
= 0.0668

Approximately 6.68% of boxes are underweight.


0
0.5
1
1.5
2
2.5
15 15.5 16 16.5 17 17.5
P
r
o
b
a
b
i
l
i
t
y

D
e
n
s
i
t
y
Assignment Business Mathematics (STA117)
Page 5 of 8
The Companys lawyers insist that the current proportion of underweight boxes is unacceptable
and it may create problems. They insist that no more than 4% of the boxes can be underweight.
So the company needs to set the machine to put a little more cereal in each box.
(b) What mean setting do they need? (Total: 10 Marks)
Steps
i. State the variable and the objective. (2)
Variable:
Let A = weight of cereal in the box.
Objective:
Finding the average weight (mean) when probability of underweight boxes is at 0.04.
ii. Determine the appropriate value of z-score that will leave no more than 4% of the boxes
weighing less than 16 oz. (3)
A~N (mean, 0.2
2
)
1 0.04 = 0.96
On the normal distribution table z-score 1.75 is closest to 0.96, i.e., 0.9599.
As the probability is less than 0.5, z-score will be a negative value. So z-score will be -1.75.
iii. Using the z-score found in part (b) ii above, determine the mean weight that will enable
the company to keep no more than 4% of the boxes weighing less than 16 oz. (5)
When A = 16, z = 1.75 and standard deviation = 0.2,
Mean = A (z * standard deviation)
Mean = 16 (-1.75 * 0.2)
Mean = 16 (-0.35)
Mean = 16 + 0.35
Mean = 16.35
The company should use a mean weight of 16.35 oz.
Assignment Business Mathematics (STA117)
Page 6 of 8
3. (a) Visit http://www.random.org and click on numbers --> integers.
Generate 60 random integers.
Each integer should have a value between 1 and 6.
Format in 10 columns
Click on "Get Numbers"
Take a print screen of the list of numbers.
(b) Tabulate the numbers generated and their frequencies on a table of the format below.
NUMBER FREQUENCY
1 8
2 8
3 17
4 8
5 6
6 13
Assignment Business Mathematics (STA117)
Page 7 of 8
(c) By performing an appropriate test (Chi-squared test), determine whether the random
numbers generated are represented fairly.
H0: Random numbers generated are represented fairly.
H1: Random numbers generated are not represented fairly.
Chi-squared Formula
X
2
= ( ( Oi - Ei )
2
/ Ei )
Oi = Observed Value
Ei = Expected Value
Ei = Total Frequency / Number of Categories
Ei = 60 / 6
Ei = 10
Category Observed Value (O
i
) Expected Value (E
i
) O
i
-

E
i
( O
i
-

E
i
)
2
( O
i
-

E
i
)
2
/ E
i

1 8 10 -2 4 0.4
2 8 10 -2 4 0.4
3 17 10 7 49 4.9
4 8 10 -2 4 0.4
5 6 10 -4 16 1.6
6 13 10 3 9 0.9
Total 60 60 - - 8.6
X
2
= ( ( Oi - Ei )
2
/ Ei )
X
2
= 8.6
Degrees of Freedom (df) = Number of Outcomes 1
= 6 1 = 5
Level of significance: alpha (a) = 0.05
Assignment Business Mathematics (STA117)
Page 8 of 8
Chi-Square Distribution Table
DF 0.25 0.20 0.15 0.10 0.05 0.025 0.02 0.01 0.005 0.0025 0.001 0.0005
1 1.32 1.64 2.07 2.71 3.84 5.02 5.41 6.63 7.88 9.14 10.83 12.12
2 2.77 3.22 3.79 4.61 5.99 7.38 7.82 9.21 10.60 11.98 13.82 15.20
3 4.11 4.64 5.32 6.25 7.81 9.35 9.84 11.34 12.84 14.32 16.27 17.73
4 5.39 5.59 6.74 7.78 9.49 11.14 11.67 13.23 14.86 16.42 18.47 20.00
5 6.63 7.29 8.12 9.24 11.07 12.83 13.33 15.09 16.75 18.39 20.51 22.11
6 7.84 8.56 9.45 10.64 12.53 14.45 15.03 16.81 13.55 20.25 22.46 24.10
7 9.04 5.80 10.75 12.02 14.07 16.01 16.62 18.48 20.28 22.04 24.32 26.02
8 10.22 11.03 12.03 13.36 15.51 17.53 18.17 20.09 21.95 23.77 26.12 27.87
9 11.39 12.24 13.29 14.68 16.92 19.02 19.63 21.67 23.59 25.46 27.83 29.67
10 12.55 13.44 14.53 15.99 18.31 20.48 21.16 23.21 25.19 27.11 29.59 31.42
Critical Value: X
2
0.05, 5 = 11.07
Test result (8.6) is less than the critical value. Hence null hypothesis is accepted at the
significance level of 0.05.
(a) Interpret the result from part (b) above.
From doing the chi-squared test, it is known that the numbers generated randomly are
represented fairly, there is no bias according to the chi-squared test with significance level of
5%.
(6 + 6 + 6 + 2 = 20 marks)
TOTAL MARKS = 50