Problems on Binomial Distribution

1. Coke or Pepsi. Assume that equal numbers of people prefer Coke to Pepsi and Pepsi to Coke.
You ask 100 people whether they prefer Coke to Pepsi. What is the probability that exactly 60
people prefer Coke to Pepsi and the probability that between 40 and 60 people prefer Coke
to Pepsi?

2. Elevator rails. Of all the elevator rails you produce, 3 percent are considered defective. You
are about to ship a batch of 10,000 elevator rails to a customer. To determine whether the
batch is acceptable, the customer will randomly choose a sample of 100 rails and check
whether each sampled rail is defective. If two or fewer sampled rails are defective, the cus-
tomer will accept the batch. How can I determine the probability that the batch will be
accepted?

3. Airline overbooking Airlines don’t like flights with empty seats. Suppose that, on average, 95
percent of all ticket holders show up for a flight. If the airline sells 105 tickets for a 100-seat
flight, what is the probability that the flight will be overbooked?

4. The local Village Deli knows that 1,000 customers come for lunch each day. On average, 20
percent order the specialty vegetarian sandwich. These sandwiches are premade. How many
should the deli make if it wants to have a 5 percent chance of running out of vegetarian
sandwiches?

5. Suppose that, on average, 4 percent of all CD drives received by a computer company are
defective. The company has adopted the following policy: Sample 50 CD drives in each ship-
ment and accept the shipment if none are defective. Using this information, determine the
following:
a. What fraction of shipments will be accepted?
b. If the policy changes so that a shipment is accepted if only one CD drive in the sample
is defective, what fraction of shipments will be accepted?
c. What is the probability that a sample size of 50 will contain at least 10 defective CD
drives?
6. Suppose that during each year, a given mutual fund has a 50 percent chance of beating the
Standard & Poor’s 500 Stock Index (S&P Index). In a group of 100 mutual funds, what is the
probability that at least 10 funds will beat the S&P Index during at least 8 out of 10 years?
 7. When tested for extra sensory perception (ESP), participants are asked to identify the shape
on a card from a 25-card deck. The deck consists of five cards with each of five shapes. If a
person identifies 12 cards correctly, what would you conclude?

8. Suppose that in a group of 100 people, 20 have the flu and 80 do not. If you randomly select
30 people, what is the chance that at least 10 people have the flu?

9. A student is selling magazines for a school fundraiser. There is a 20 percent chance that a given
house will buy a magazine. He needs to sell five magazines. Determine the probability that he
will need to visit 5, 6, 7, . . . , 100 houses to sell five magazines.

10. In the seventeenth century, French mathematicians Pierre de Fermat and Blaise Pascal were
inspired to formulate the theory of modern probability after trying to solve the Problem of
the Points. Here is a simple example: Pascal and Fermat take turns tossing coins. Fermat wins
a point if a head is tossed, and Pascal wins a point if a tail is tossed. If Pascal is ahead 8–7 and
the first player with 10 points wins, what is the chance that Pascal will win?

Problems on Poisson Distribution

1. Beer drinkers order an average of 40 pitchers of beer per hour at Nick’s Pub in Bloomington,
Indiana: What is the probability that at least 60 pitchers are ordered in a one-hour period?
What is the chance that the time between ordered pitchers will be 30 seconds or less?

2. Suppose that teenage drivers have an average of 0.3 accidents per year: What is the
probability that a teenager will have no more than one accident during a year? What is the
probability that the time between accidents will be six months or less?
 3. Since 1900, a fraction (.00124) of all Major League Baseball games have resulted in no-hitters.
A team plays 162 games in a season. What is the chance that a team pitches two or more no-
hitters during a season?

Problems on Normal Distribution

1. Suppose you can set the mean number of ounces of soda that is put into a can. The actual
number of ounces has a standard deviation of 0.05 ounces: If you set the mean at 12.03
ounces, and a soda can is acceptable if it contains at least 12 ounces, what fraction of cans is
acceptable? What fraction of cans have less than 12.1 ounces? What should you set the mean
to if you want at most 1 percent of your cans to contain at most 12 ounces?

2. Annual demand for a drug is normally distributed with a mean of 40,000 units and a standard
deviation of 10,000 units: What is the probability that annual demand is from 35,000 through
49,000 units? If you want to have only a 5 percent chance of running out of the drug, at what
level should you set annual production?

3. The probability of winning a game of craps is 0.493. If I play 10,000 games of craps and bet
the same amount on each game, what is the probability that I’m ahead? Begin by determining
the mean and standard deviation of the profit on one game of craps. Then use the central
limit theorem.

4. Weekly sales of Volvo’s Cross Country station wagons are normally distributed with a mean of
1,000 and standard deviation of 250: What is the probability that, during a week, from 400
through 1,100 station wagons are sold? There is a 1 percent chance that fewer than what
number of station wagons is sold during a week?

5. There are six hundred Economics students in the post graduate classes of a university, and
the probability of any student to need a copy of a particular book from the university library
on any day is 0.05. How many copies of the book should be kept in the university library so
 that the probability may be greater than 0.90 that none of the students needing a copy from
the library has to come back disappointed? [Ans: 36.84 (37 aprox) ]

6. The marks obtained by a number of students for a certain subject are assumed to be
approximately normally distributed with mean value 65 and with a standard deviation of 5.
If 3 students are taken at random from this set, what is the probability that exactly two of
them will have marks over 70? [Ans: 0.06357]

Problems on Exponential Distribution

1. Beer drinkers order an average of 40 pitchers of beer per hour at Nick’s Pub in Bloomington,
Indiana: What is the chance that the time between ordered pitchers will be 30 seconds or
less?

2. Suppose that teenage drivers have an average of 0.3 accidents per year: What is the
probability that a teenager will have no more than one accident during a year? What is the
probability that the time between accidents will be six months or less?

3. I am next in line at a fast-food restaurant in which customers wait in a single line, and the time
to serve a customer follows an exponential distribution with a mean of 3 minutes. What is the
chance that I will have to wait at least 5 minutes to be served?