Homework #12 Solution

4.46 Annual incomes for engineers in a certain industry have approximately a gamma distribution with
= 600 and = 50.

(a) Find the mean and the variance of these incomes.

ans: Let X denote the annual income. E(X) = = 600(50) = 30000, and variance V ar(X) = 2 =
600(50)2 = 1500000

(b) Would you expect to find many engineers in this industry whose annual inceoms exceed $35000?
1
ans: Use Tchebysheff theorem (P (|X | > k) < ), we obtain
k2

P (X > 35000) = P (X 30000 > 5000) < P (|X 30000| > 5000)
5000
= P (|X 30000| > 1500000)
1500000

5000 1
Therefore the value k = and 2 = 0.06. We can conclude that only %6 of the annual income
1500000 k
for the engineers in this industry exceeds $35000. Therefore we do not expect the income would exceed
$35000.

4.47 The weekly downtime Y (in hours) for a certain industrial machine has approximately a gamma distri-
bution, with = 3 and = 2. The loss L (in dollars) to the industrial operation as a result of this
downtime is given by 30Y + 2Y 2 .

(a) Find the expected value and the variance of L.

ans: Form the book we know E(Y ) = = 3 2 = 6, and V ar(Y ) = 2 = 3(22 ) = 12. Use the
computational formula for the variance V ar(Y ) = E(Y 2 ) (E(Y ))2 , we have 12 = E(Y 2 ) 62 . Thus
E(Y 2 ) = 48. We now find the expected value of L.

E(L) = E(30Y + 2Y 2 ) = 30E(Y ) + 2E(Y 2 ) = 30(6) + 2(48) = 276

and the variance

V ar(L) = E(L2 ) (E(L))2 = E[(30Y + 2Y 2 )2 ] (276)2 = E(900Y 2 + 120Y 3 + 4Y 4 ) (276)2

= 900E(Y 2 ) + 120E(Y 3 ) + 4E(Y 4 ) (276)2

It is better to find the moment generating function M (t) for Y (Refer to the HW 4.95.)
Z
1
M (t) = E(etY ) = ety y 1 ey/ dy = (1 t)
0 ()

Since = 3 and = 2, the m.g.f of Y is M (t) = (1 2t)3 . M 0 (t) = (3)(1 2t)4 (2) = 6(1 2t)4 ,
thus E(Y ) = M 0 (0) = 6. M 00 (t) = 6(4)(1 2t)5 (2) = 48(1 2t)5 , thus E(Y 2 ) = M 00 (0) = 48.
M 000 (t) = 48(5)(1 2t)6 (2) = 480(1 2t)6 , thus E(Y 3 ) = M 000 (0) = 480. Finally M (4) (t) =

1
 480(6)(1 2t)7 (2) = 5760(1 2t)7 , thus E(Y 4 ) = M (4) (0) = 5760. Plug those numbers into the
variance formula we obtain

V ar(L) = 900(48) + 120(480) + 4(5760) (276)2 = 47664

(b) Find an interval that will contain L on approximately %89 of the weeks that the machine is in use.
1
ans: Using the Tchebysheffs theorem, we wnat k such that 1 2 = 0.89; i.e. k = 3. The the desired
p k
interval is |L E(L)| < k V ar(L); i.e. 3 47664 < L 276 < 3 47664. Since L is nonnegative,

0 < L < 276 + 3 47664, which is (0, 930.963).

4.55 Use the standard normal distribution table to find the following probabilities for a standard normal
random variable Z.

(a) P (0 Z 1.2) (b) P (0.9 Z 0) (c) P (0.3 Z 1.56) (d) P (0.2 Z 0.2)

(e)P (2 Z 1.56)

ans: (a) 0.3849; (b) 0.3159; (c) 0.3227; (d) 0.1586; (e) 0.9178.

4.56 For a standard normal distribution variable Z., use the table to find a number z0 such that the following
probabilities obtained.

(a) P (Z z0 ) = 0.5 (b) P (Z z0 ) = 0.8749 (c) P (Z z0 ) = 0.117 (d) P (Z z0 ) = 0.617

(e) P (z0 Z z0 ) = 0.9 (f) P (z0 Z z0 ) = 0.95

ans: (a) z0 = 0; (b) z0 = 1.15; (c) z0 = 1.19; (d) z0 = 0.3; (e) z0 = 1.645; (e) z0 = 1.96

4.57 The weekly amount spent for maintenance and repairs in a certain company has an approximately
normal distribution , with a mean of $400 and a standard deviation of $20. If $450 is budgeted to cover
repairs for next week, what is the probability that the actual costs will exceed the budgeted amount?

ans: Let X denote the amount spent on repairs. Then X has a normal distribution with mean =
400 and standard deviation = 20. $450 is budgeted for repairs for next week. We want to find
the probability that the costs will exceed $450, i.e. P (X > 450). Convert to the standard normal
X 450 400
Z= , X > 450 implies Z > = 2.5
20
P (X > 450) = P (Z > 2.5) = 1 P (Z 2.5) = 1 0.9938 = 0.0062

4.58 In the setting of the previous exercise, how much should be budgeted weekly for maintenance and repairs
to ensure that the probability the budgeted amount will be exceeded in any given week is only 0.1?

ans: Suppose the budget is x0 . We want the probability of X > x0 is 0.1, i.e. P (X > x0 ) = 0.1.
We first find the Z score that has a probability P (Z > z0 ) = 0.1, which means that P (Z z0 ) = 0.9.
After check the table we found P (Z 1.28) = 0.9. Therefore z0 = 1.28 and we know the conversion
x0 400 x0 400
z0 = . Solving the equation 1.28 = , x0 = 425.6.
20 20
2
4.66 The time until first failure of a brand ink-jet printers is approximately normally distributed, with a
mean of 1500 hours and a standard deviation of 200 hours.

(a) What fraction of these printers will fail before 1000 hours?

ans: Let X be the time until first failure. The X follows a normal distribution with a mean = 1500 and
a standard deviation = 200. The printers fail before 1000 hours, means X < 1000. The corresponding
X 10001500
Z= score is Z < 200 = 2.5 The probability is

P (X < 1000) = P (Z < 2.5) = 0.0062

(b) What should be the guarantee time for these printers if the manufacturer wants no more than %5
to fail within the guarantee period?

ans: Let x0 be the guarantee time. We want to find x0 that the printers would fail before x0 is less than
%5. That is P (X < x0 ) = 0.05. From the table we can find that P (Z < 1.645) = 0.05. Therefore we
x0 1500
set = 1.645. Solving for x0 , x0 = 1171.
200