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Yash Vazirani

D.Ortmeyer
GB 210
Fall, 2009
Graded Assignment #2
(Due: Friday, 10/30)

My preference is that you work alone in completing this assignment. If, however, you are
stumped about how to proceed you may seek help from one other source (me, a friend, a
mentor, etc). If you do work with another person, you must tell me who you worked
with (i.e. write the name of the person and describe who that person was – fellow
student in GB210, other student, instructor, etc). Write this information on your
assignment hand-in and explain what their contribution was and how it helped you to
understand the problem.

Problems #1 and #2 do not require use of Megastat. Problems #3 and #4 do. Be certain to
include your Megastat output for questions 3 and 4.

Problem #1 - Probability (no Megastat needed):


Cooper Realty is a small real estate company located in Albany, New York, specializing
primarily in residential listings. They recently became interested in determining the
likelihood of one of their listings being sold within a certain number of days. An analysis
of company sales of 800 homes in previous years produced the following data.

Days Listed Until Sold


Initial Asking Under 30 31-90 Over 90 Total
Price
Under $150,000 50 40 10 100
$150,000-$199,999 20 150 80 250
$200,000-$250,000 20 280 100 400
Over $250,000 10 30 10 50
Total 100 500 200 800

(a) If A is defined as the event that a home is listed for more than 90 days before
being sold, estimate the probability of A
200/800 = 25%
(b) If B is defined as the event that the initial asking price is under $150,000, estimate
the probability of B
100/800 = 12.5%
(c) What is the probability of A ∩ B
10/800 = 1.25%
(d) Assuming that a contract was just signed to list a home with an initial asking price
of less than $150,000, what is the probability that the home will take Cooper
Realty more than 90 days to sell?
10/100 = 10%
(e) Are events A and B independent? Why or why not?
No, A and B are not independent because the probability of A and the probability
of A given B are not the same, therefore the events are not independent.

Problem #2 – Expected Value (no Megastat needed):


The demand for a product of Carolina Industries varies greatly from month to month.
The probability distribution in the following table, based on the past two years of data,
shows the company’s monthly demand.

Unit Demand Probability


300 .20
400 .30
500 .35
600 .15

(a) If the company bases monthly orders on the expected value of the monthly
demand what should Carolina’s monthly order quantity be for this product?
445
(b) Assume that each unit demanded generated $70 in revenue and that each unit
ordered costs $50. How much will the company gain or lose in a month if it
places an order based on your answer in part (a) and the actual demand for the
item is 300 units?
(50 x 445) – (70 x 300) = -1250 (loss)

Problem #3 - Binomial RV (use MegaStat for this question and include your
printout):
A university found that 20% of its students withdraw without completing the introductory
statistics course. Assume that 20 students registered for the course.
(a) Use W as the binomial random variable for this problem. Explain in words what
W represents. Explain why this is an example of a binomial experiment, that is,
what conditions have to hold for this to be analyzed as a binomial?

W represents the number of students that withdraw from the class. The
experiment is considered binomial since there are two possible outcomes. The
students can either withdraw from the class or they can choose to stay in it.

(b) Compute the probability that two or fewer students will withdraw.
20.6%
(c) Compute the probability that exactly four will withdraw.
21.8%
(d) Compute the probability that more than three will withdraw.
58.9%
(e) Compute the expected number of withdrawals.
4 withdrawals

Problem #4 – Binomial RV (use MegaStat for this question and include your
printout).
There is a 14% chance that a Noodles &Company customer will order bread with the
meal. Use MegaStat to find the probability that in a sample of 10 customers:

(a) More than five will order bread (greater than 5)


.001%
(b) Two or fewer will order bread
84.55%
(c) None of the 10 will order bread
22.13%
(d) Is the probability distribution skewed left or right?
Right

L;
20 n
0.2 p

cumulative
X p(X) probability
0 0.01153 0.01153
1 0.05765 0.06918
2 0.13691 0.20608
3 0.20536 0.41145
4 0.21820 0.62965
5 0.17456 0.80421
6 0.10910 0.91331
7 0.05455 0.96786
8 0.02216 0.99002
9 0.00739 0.99741
10 0.00203 0.99944
11 0.00046 0.99990
12 0.00009 0.99998
13 0.00001 1.00000
14 0.00000 1.00000
15 0.00000 1.00000
16 0.00000 1.00000
17 0.00000 1.00000
18 0.00000 1.00000
19 0.00000 1.00000
20 0.00000 1.00000
1.00000

4.000 expected value


3.200 variance

1.789 standard deviation


Group Work

Isaac and I worked together on the Megastat part of the project. He is a classmate in my
GB 210 class from the same section. I found questions 3 and 4 challenging, and he helped
me with how to go about answering them.