Example 1

Table 1 shows the sales revenue and advertisement expenses of a company for the past 10 months. Find the coefficient of correlation between sales and advertisement. Table 1 Sales and advertisement for 10 months.
Month Advertisement (in Thousand Rupees) Sales (in thousand rupees) Jan 10 Feb 11 Mar 12 Apr 13 May 11 Jun 10 Jul 9 Aug 10 Sept 11 Oct 14

110

120

115

128

137

145

150

130

120

115

Solution : =

=-0.51

Example 2
Table 2 exhibits consumption of electricity (in gigawatt hours) by industry, agriculture, domestic and commercial sectors in India. Compute the range of electricity consumption for these sectors. Table 2 Consumption of electricity (in gigawatt hours) by industry, agriculture, domestic and commercial sectors in India from 1994-1995 to 2004-2005. Year 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 Industry 100,126 104,693 104,165 104,926 105,080 106,728 107,622 107,296 114,959 124,573 137,589 Agriculture 79,301 85,732 84,019 91,242 97,195 90,934 84,729 81,673 84,486 87,089 88,555 Domestic 47,915 51,733 55,267 60,346 64,973 70,520 75,629 79,694 83,355 89,736 95,660 Commercial 15,973 16,996 17,519 19,367 19,799 21,161 22545 24,139 25,437 28,201 31,381

Example 3

In a grocery store, the mean expenditure per customer is Rs. 2000 with a standard deviation of Rs. 300. If a random sample of 50 customers selected, what is the probability that the sample average expenditure per customer is more than Rs. 2080? Solution : = 1.88

Example 4
For example 3, determine the probability that the sample average expenditure per customer is between Rs. 2040 and Rs. 2080. Solution : = 0.04699-0.3264 = 0.1435

Example 5
The bottled water segment in India has witnesss rapid growth. Institutional users are responsible for 30% sales in the market. If 100 customers are randomly selected, what is the probability that 25 or more customers are institutional users? Solution : = 0.3621+0.05000 = 0.8621

Example 6
Unisys.com is one of the most frequented b2b websites. According to WSJ, business partners accessing Unisys spend an average of 65.7 minutes, possibly the longest average time per visit of any b2b website. Assume that the length of a visit on the Unisys website is distributed as a normal random variable with a standard deviation of 15 minutes. a. b. c. d. What is the probability that a randomly selected visit will last more than 90 minutes? What is the probability that a randomly selected visit to Unisys.com will last between 60 and 90 minutes? Only 20% of the visits will last less than how many minutes? Between what two values (in minutes) symmetrically distributed around the population mean will 90% of the visits last?

Example 7

By the year 2014-2015, the telephone instrument industry is estimated to grow by 106.20 millions units as compared to 1993-1994 when the total market size was only 3 million units. Bharti Terletech, BPL Telecom, ITI (Indian Telephone Industries, Bharti Systel, Tata Telecom and Godrej Telecom are some of the major players in the market. Bharti Teletech has a market share of 24%. If 200 purchases of telephone instruments are randomly selected, what is the probability that 55 or more are Bharti Teletech customers? Solution : = 1.16 The z value is obtained is 1.16 and corresponding probability from the normal table is 0.3770. This is the area between z=0 and z=1.16. so, total area less than 1.16 is equal to 0.5000+0.3770=0.8770. Hence, when 200 purchasers of telephone instruments are randomly selected, probability that 55 or more are Bharti Teletech customers is equal to 1-0.8770=0.1230

Example 8
A researcher has taken a random sample of size 70 from a population with a sample mean of 35 and a population standard deviation of 4.62. Construct a 90% confidence interval to estimate the population mean. Solution : = p(34.091 35.909) = 0.90

Example 9
A researcher wants to measure the income level of employees working in a company. The total employee strength of the company is 1200. A random sample of 50 employees reveals that the average income of sampled employees is Rs 15,000. Historical data reveals that the standard deviation of the income of the employee is approximately Rs. 1500. Construct a 99% confidence interval for obtaining the average income of all the employees working in this company. Solution : = 15,000-534.96 15,000+534.96 = 14,465.04 15,534.96

Example 10
The personnel department of an organization wants to apply cost-cutting measures for improving efficiency. As the first step, the personnel department wants to curtail telephone expenses incurred by employees. For this, personnel department has taken a random sample of 10 employees and gathered the following data about telephone expenses (in thousand rupees) in the previous year: 10,12,24,23,11,14,15,34,16,23 Construct a 95% confidence interval to estimate the average telephone expenses of the employees in the population. Solution : = 18.2-5.42 18.2+5.42 = 12.78 23.62

Example 11
A research company conducted a survey on 300 randomly selected tax payers. It found that out of 300 tax payers, 180 tax payers have filled the SARAL form correctly. Construct a 95% confidence interval to estimate the percentage of tax payers who have filled the form correctly in the population. Solution : = 0.54 0.65

Example 12
A population has a standard deviation of 4.2 and sampling error of 2.4. Determine the sample size to estimate the mean of the population with 95% confidence level? Solution : = n=

= 11.76 = 12 Apprpximately

Example 13
A consumer electronics company wants to determine the job satisfaction levels of its employees. For this, they ask a simple question, are you satisfied with your job? It was estimated before the study that no more than 30% of the employees would answer yes. What should be the sample size for this company to estimate population proportion to ensure 95% confidence level in result, and to be within 0.04 of the true population proportion? Solution : =

= 504.18

Example 14
A multinational company sells through small retail shops. The company has taken a random sample of 75 retail shops. The average sales per day from the sampled shops are computed as Rs. 5000. The population standard deviation is estimated as Rs. 1000. Construct a 90% confidence interval to estimate the mean for the population. Solution : = 4810.0686 5189.9313

Example 15

A mineral company has launched a new 10 litres bottle in the urban market. After sometimes, the firm receives some complaints that the bottles do not contain exactly 10 litres. For verifying this complaint, the companys investigating team has taken a random sample of 120 bottles from different places. The sample mean is computed as 9.5 and the sample standard deviation is computed as 1.1. Construct a 95% confidence interval to estimate the mean for the population. Solution : = 9.30318 9.69681

Example 16
A distemper manufacturing company has launched a 2 kg bag in the market and decided to price this bag at Rs. 100. The price of this bag varies from town to town. The company researches have taken a random sample from 40 shops located in different towns. The price collected from 40 shops is given in Table . Construct a 99% confidence interval to estimate the mean for the population.

Shop no.

Price

1 2 3 4 5 6 7 8 9 10 11 12 13 14

101 102 101 100 103 100 99 98 103 102 102 103 99 101

Shop No. 15 16 17 18 19 20 21 22 23

Price 102 99 98 101 97 102 101 102 99

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

103 104 98 97 99 101 100 99 98 102 101 99 102 102 103 101 100

Solution : = 99.852 101.348

Example 17
A company receives copper plates from a vendor to use as an important part of its machinery. The company had specified that the diameter of the copper plates must be 20 millimeters. Production department of the company has observed that a few of the supplied plates do not meet the specifications. For verifying this, the company researches have taken a random sample of 20 plates. Assuming that the diameters of these plates are normally distributed, construct a 95% confidence interval for estimating the population mean diameter. Diameter of 20 randomly sampled plates is given in table .

Diameter of the copper plates supplied by vendor 19.92 20.06 19.90 20.08 20.00 19.94 20.12 19.96 20.11 19.97 20.00 20.03 19.98 20.05 19.99 20.07 20.01 20.03

20.00 19.99

Solution : = 19.9828 20.0382

Example 18

The quality control department of an electric bulb manufacturing company wants to estimate the average life of the electric bulbs. For this, a quality control inspector has taken a random sample of 20 bulbs. Life of these bulbs in hours is given in Table . Assuming that the life of the bulb is normally distributed, construct a 90% confidence interval for estimating the population mean.

Life of 20 randomly sampled bulbs in hours 99 98 101 99 98 101 95 99 89 96 97 97 96 95 101 103 98 101 102 96

Solution : = 96.81 99.28

Example 19
The organized sector has a 70% market share in the storage batteries segment in India. Suppose a researcher wants to check this market share. For this purpose, the researcher has taken a random sample of 120 customers of storage batteries. Out of 120 customers, 86 customers have purchased from the organized market. Assuming customers to be normally distributed, construct a 95% confidence interval for estimating the population proportion. Solution : = 0.6360 0.7972

Example 20
The footwear market in India can be divided into three categories: leather products, rubber/PVC products, and canvas products. Market share for leather products is 10%. Suppose a footwear company wants to launch a new expensive product. The company management has decided that it will launch this product only when there is an increase in the market shares of leather products. Company researchers have taken a random sample of 200 customers and found that 28 customers have purchased leather products. Assuming customers to be normally distributed, construct a 90% confidence interval for estimating population proportion. Solution : = 0.0996 0.1803