If 10% of a population of parts is defective, what is the probability of 

randomly selecting 80 parts and finding that 12 or more parts are defective? 

Solution:

This is a problem of Binomial Distribution.

Binomial Formula: Suppose a binomial experiment consists of n trials and results in x successes.
If the probability of success on an individual trial is p, then the binomial probability is:

B ( x ; n , p )=n C x × px ×(1− p)n−x

Given:

N=8 0

10
p=10 %= =0.1
100

1− p=1−0.1=0.9

The probability that 12 or less than 12 parts will be defective is given as:

B ( 0; 8 0,0.1 )+ B ( 1; 8 0,0.1 )+ B ( 2 ; 8 0,0.1 )+ B ( 3 ; 8 0,0.1 ) +B ( 4 ; 8 0,0.1 ) +B ( 5 ; 8 0,0.1 ) + B ( 6 ; 8 0,0.1 )+ B ( 7 ; 8 0,0.

¿ 8 0 C 0 × 0.10 × 0.98 0−0 +8 0 C1 ×0.11 ×0.9 8 0−1 +8 0 C 2 × 0.12 × 0.98 0−2+ 8 0 C3 ×0.13 ×0.98 0 −3 + …+ 8 0 C11 × 0.111

¿ 0.946165

Therefore, the probability that more than 12 parts will be defective is given as:

1−0.946165

¿ 0.0538349

A survey was taken of U.S. companies that do business with firms in India. 
One of the questions on the survey was: Approximately how many years has your company
been trading with firms in India? A random sample of 44 responses to this question yielded a
mean of 10.455 years. Suppose the population standard deviation for this question is 7.7 years.
Using this information, construct a 90% confidence interval for the mean number of years that a
company has been trading in India for the population of U.S. companies trading with firms in
India.

Solution:
Confidence interval for the mean is given as:

( )
zα ×s zα ×s
2 2
x− , x+
√n √n

Given :Sample ¿ n=44

Mean , x=10.455
Standard Deviation , s=7.7

z α for 90 % confidence=1.645
2

Thus the 90% confidence interval for the mean number of years that a company has been
trading in India for the population of U.S. companies trading with firms in India is given as:

(10.455− 1.645√ 44×7.7 , 10.455+ 1.645√ 44×7.7 )

¿ ( 10.455−1.90938 , 10.455+1.90938 )

¿( 8.54562, 12.36438)

A clothing company produces men’s jeans. The jeans are made and sold with either a regular cut
or a boot cut. In an effort to estimate the proportion of their men’s jeans market in Oklahoma
City that prefers boot-cut jeans, the analyst takes a random sample of 212 jeans sales from the
company’s two Oklahoma City retail outlets. Only 34 of the sales were for boot-cut jeans.
Construct a 90% confidence interval to estimate the proportion of the population in Oklahoma
City who prefer boot-cut jeans. 

Solution:

Confidence interval for proportion is given as

p±z
( )
1−
α
2
√ p ( 1− p )
n

34
where , p represents the proportion of success= =0 .16
212

n represents sample ¿ 212

Z for 90 % confidence level=1. 645

( α2 )
Therefore, the confidence interval for the proportion of the population in Oklahoma City who
prefer boot-cut jeans is given as:

p±z
()
α
2
√ p ( 1− p )
n √
=0.16 ±1.645
0.16 ( 1−0.16 )
212
=0.16 ± 0.041455

(0.11892 , 0.20183)

In an attempt to determine why customer service is important to managers in the United

Kingdom, researchers surveyed managing directors of manufacturing plants in Scotland.* One of
the reasons proposed was that customer service is a means of retaining customers. On a scale
from 1 to 5, with 1 being low and 5 being high, the survey respondents rated this reason more
highly than any of the others, with a mean response of 4.30. Suppose U.S. researchers believe
American manufacturing managers would not rate this reason as highly and conduct a
hypothesis test to prove their theory. Alpha is set at .05. Data are gathered and the following
results are obtained. Use these data and the eight steps of hypothesis testing to determine
whether U.S. managers rate this reason significantly lower than the 4.30 mean ascertained in
the United Kingdom. Assume from previous studies that the population standard deviation is
0.574. 
3 4 5 5 4 5 5 4 4 4 4 4 4 4 4 5 4 4 4 3 4 4 4 3 5 4 4 5 4 4 4 5 5 

Solution:

Null and Alternate Hypothesis:

Null Hypothesis: U.S. managers rate this reason higher than or equal to the 4.30 mean
ascertained in the United Kingdom.

H 0 : μ≥ 4.30

Alternate Hypothesis: U.S. managers rate this reason lower than the 4.30 mean ascertained in
the United Kingdom.

H a : μ<4 .30

Analysis Plan:

The data is assumed to follow a normal distribution. Since the sample size, n>30 we shall use z-
test to test the given hypothesis.

We shall use significance level, alpha = 0.05.

Critical Value and Decision Rule:

As the alternative hypothesis is Ha: μ< 4.30, the given test is a lower-tailed z-test. Critical value
for significance level, alpha = 0.05 for a lower-tailed z-test is given as -1.645.
 Decision Rule :Reject H 0 , if z−statistic<−1.645

Test Statistic:

Sample ¿ n=33

Sample Mean , x=4.18 18182

Standard Deviation , s=0.58 3874

μ=4 .30

x−μ 4.18 18182−4.30

Test Statistic , z= = =−1.1628
s 0.583874
√n √ 33
P-Value:

p−value=0.1225(¿ p−value calculator)

Interpretation of Results and Conclusion:

Since the P-value (0.1225) is greater than the significance level (0.05), we fail to reject the null
hypothesis. The p-value implies the probability of rejecting a true null hypothesis.

Thus, at a significance level of 0.05, there is no sufficient evidence to support the claim that the
U.S. managers rate this reason lower than the 4.30 mean ascertained in the United Kingdom.

A study is conducted using only Boeing 737s travelling 500 miles on comparable routes during
the same season of the year. Can the number of passengers predict the cost of flying such
routes? It seems logical that more passengers result in more weight and more baggage, which
could, in turn, result in increased fuel consumption and other costs. The data are the costs and
associated number of passengers for twelve 500-mile commercial airline flights using Boeing
737s during the same season of the year. Based on the results given below, answer the following
questions. 
a) Check the conditions for a hypothesis test and CI of slope. 
b) Test to see if there is a significant relationship between the 2 variables. 
c) Construct and interpret a 95% CI for the slope. 
d) Suppose a flight gets 75 passengers. What would their expected GPA be? Is this a good 
estimate? Explain in terms of R-sq

Solution:

a) The conditions for a hypothesis test and CI of slope are fulfilled by the given data.
b) Please refer to the EXCEL attachment for the regression analysis and hypothesis test to
see if there is a significant relationship between the 2 variables. 

c) The 95% CI for the slope is given as (0.0311, 0.0503). If a number of observations are
taken the slope of the regression line between number of passengers and cost shall fall
between 0.0311 and 0.0503 about 95% of the time.

d) The regression equation is given as: y = 0.041x +1.570.

For, x = 75, GPA = 0.041*75 +1.570 = 4.622.

The proportion of variability in a dataset that is accounted for is given by the coefficient
of determination R2 , which for this regression model is 0.899, which is close to its ideal
value of 1. Hence the given regression model is a good predictor of GPA given the
number of passengers.