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Statistics Assignment Chapter#7

The document covers two questions related to continuous probability distributions in a business context. The first question involves the uniform distribution of credit application processing times, requiring calculations of expected value, standard deviation, and various probabilities. The second question pertains to the normal distribution of dental insurance costs for employees, asking for percentages and thresholds related to costs incurred.

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4 views1 page

Statistics Assignment Chapter#7

The document covers two questions related to continuous probability distributions in a business context. The first question involves the uniform distribution of credit application processing times, requiring calculations of expected value, standard deviation, and various probabilities. The second question pertains to the normal distribution of dental insurance costs for employees, asking for percentages and thresholds related to costs incurred.

Uploaded by

shahd2200453
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Statistics for Business and Economics Course Codes: STA201, STA202

Chapter 7: Continuous Probability Distribution

Question One:
Many retail stores offer their own credit cards. At the time of the credit application, the customer
is given a certain percentage discount on the purchase. The time required for the credit application
process follows uniform distribution with times ranging from 4 minutes to 10 minutes.
a) What is the expected value and standard deviation of the process time?
b) What is the probability of an application will take between 6 and 9 minutes?
c) What is the probability that an application will take less than 4 minutes?
d) What is the probability that an application will take exactly 2minutes?
e) What is the probability that an application will take less than 7 minutes?
f) What is the probability that an application will take more than 5 minutes?

Question Two:

Shaver Manufacturing Inc. offers dental insurance to its employees. A recent study by the human
resources director shows the annual cost per employee per year followed the normal probability
distribution, with a mean of $1,280 and a standard deviation of $420 per year.

a) What percentage of the employees cost more than $1,500 per year for dental expenses?
b) What percentage of the employees cost between $1,500 and $2,000 per year?
c) What percentage of the employees cost between $1,280 and $2,200 per year?
d) What percentage of the employees cost between $1,000 and $2,200 per year?
e) What was the cost below, which 80 percent of the employees had incurred the highest
dental expenses?
f) What was the cost for the top 10 percent of the employees who incurred the highest dental
expenses?

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