COMM 215: BUSINESS STATISTICS

PRACTICE PROBLEMS

The Normal Probability Distribution

1. The time required to complete a final examination in a particular college course is normally distributed with a
mean of 80 minutes and a standard deviation of 10 minutes.
a. What is the probability of completing the exam in 1 hour or less?
b. What is the probability a student will complete the exam in more than 60 minutes but less than 75
minutes?
c. Assume that the class has 60 students and that the examination period is 90 minutes in length. How
many students do you expect will be unable to complete the exam in the allotted time?

2. The length of time required to complete a small-business income tax form by a professional tax accountant is
approximately normally distributed with a mean of 4.5 hours and standard deviation of 0.6 hours. The
accountant has 80 small-business tax forms to complete.
a. About how many of them will take more than 4 hours to complete?
b. At least how long would it take to complete a form that is one of the 10 most time-consuming forms
to complete?
c. If a form takes longer than average to complete, what is the probability that it will take longer than
5.1 hours?

3. A recent survey indicated that the average starting salary for an accountant with an MBA was $34,265. For a
person with a master’s degree in electrical engineering, it was $35,185. Suppose both starting salaries are
normally distributed with a standard deviation of $2,000 for accountants and $2,400 for electrical engineers.
a. What is the probability that the starting salary of an accountant will be either more than $36,000 or
less than $33,500?
b. What is the probability that a randomly selected accountant and a randomly selected electrical
engineer will both have starting salaries greater than $36,000?
c. Ninety percent of electrical engineers will have a starting salary that is less than what amount?

4. A study of Furniture Wholesales, Inc. regarding the payment of invoices revealed that, on average, an invoice
was paid 20 days after it was received. The standard deviation equaled 5 days. Assume the payments are
normally distributed.
a. What is the probability that a randomly selected invoice will not be paid between 18 and 26 days?
b. Management wants to encourage their customers to pay their monthly invoices as soon as possible.
Therefore, it was announced that a two-percent reduction in price would be in effect for customers
who pay within seven working days of the receipt of the invoice. Of those invoices that were paid in
20 days or less, what proportion received the two-percent discount?
c. If 10 invoices are independently selected, what is the probability that at least one will be paid between
18 and 26 days?
d. Out of 200 invoices, how many are expected to be paid within 15 days?

COMM 215 – Practice Problems 1

5. The length of a metal rod produced by a manufacturing process is normally distributed with a mean of 140
mm and a standard deviation of 0.2 mm.
a. Compute the probability that a randomly selected rod is longer than 140.5 mm.
b. Compute the probability that a randomly selected rod is between 140.2 and 140.5 mm.
c. A rod is considered defective if it is less than 139.8 mm or if it is longer than 140.2 mm. Compute
the probability that a randomly selected rod will be defective.
d. In a sample of 15 rods, compute the probability that there will be:
i. no defective rods.
ii. exactly 5 defective rods.

6. The length of time it takes Revenue Canada to send refunds to taxpayers after the return is received is
normally distributed with a mean of 12 weeks and a standard deviation of 3 weeks.
a. What proportion of taxpayers should get sent a refund within 6 weeks.
b. What proportion of refunds will be sent more than 15 weeks after the tax return has been received?
c. How long will it take before 90% of taxpayers have been sent their refunds?

7. Acme, Incorporated, is in the midst of a cost-cutting drive. One of the possible ways of saving money is in
paper use. The amount of paper used per week is approximately normally distributed with a mean of 250 kg.
and a standard deviation of 45 kg.
a. What is the probability that the use of paper in a week will exceed 214 kg.?
b. Acme has set a target of no more than 200 kg. of paper to be used in a week. About how many weeks
a year (52 weeks) already meet this target?
th
c. Estimate the 60 percentile in current weekly use.

COMM 215 – Practice Problems 2