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BUSINESS STATISTICS
Level 3
Wednesday 6 April
Subject Code: 3009
Answer 5 questions.
Write your answers in blue or black ink/ballpoint. Pencil may be used only for graphs, charts,
diagrams, etc.
All answers must be correctly numbered but need not be in numerical order.
You may use a calculator provided the calculator gives no printout, has no word display
facilities, is silent and cordless. The provision of batteries and their condition is your
responsibility.
3009/2/11
Page 1 of 7
ASE 3009 2 11 1
QUESTION 1
The Marketing Manager of an internet trading company, has been investigating a possible link
between the different parts of the world and customer expenditure. A random sample of 1250
customers showed the following distribution.
World Region
Expenditure
Under 200
200 and
under 750
750 and
over
(a)
Europe
Asia
North
America
Rest of the
World
60
90
115
35
120
260
280
40
70
50
105
25
Test whether there is a significant association between different parts of the world
and customer expenditure.
(12 marks)
Before trading on the internet, the company operated a mail order business, and the percentage
distribution of customer expenditure was as follows:
(b)
Europe
Asia
North
America
Rest of the
World
19%
33%
40%
8%
Has the distribution of customer expenditure changed since the company changed
trading from mail order to the internet?
(8 marks)
(Total 20 marks)
QUESTION 2
(a)
Explain, and give a business example of, what is meant in probability by:
(i)
(ii)
An industrial chemical company has three new products (A, B and C) in development. It estimates the
probability of successful development of the products as 0.5, 0.6 and 0.7 respectively.
(b)
(c)
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Page 2 of 7
QUESTION 3
(a)
The table below shows the length of service for a random sample of 10 employees, and the value of
their weekly output.
Employee
Service (years)
Value of weekly
output
000
(b)
35.3
46.3
34.9
35.2
10
45.9
35.2
14
46.1
37.9
35.8
36.9
(c)
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Page 3 of 7
QUESTION 4
In 2010 a random sample of 360 small businesses revealed the following distribution for annual sales.
Number of
businesses
Sales 000
Over 40 and up to 60
Over 60 and up to 80
Over 80 and up to 100
Over 100 and up to 140
Over 140 and up to 200
(a)
65
77
86
74
58
Estimate the mean and the standard deviation of sales per business.
(8 marks)
Test whether there has been a significant increase in the average sales for small businesses.
(7 marks)
(c)
QUESTION 5
(a)
Quality control procedures are used, which set the warning limits at the 0.025 probability point and
action limits at the 0.001 probability point. This means, for example, that the upper action limit is set so
that the probability of the means exceeding the limit is 0.001.
In a manufacturing process, the internal diameter of a boring is set at 200 mm, with a standard
deviation of 2 mm. Samples of 8 items at a time are taken from the production line to check the
accuracy of the manufacturing process.
(b)
(i)
Calculate the values of the action and warning limits and construct a quality
control chart to monitor the manufacturing process.
(iii)
The results for 5 samples are given below. Plot these on your quality control
chart and comment on the results.
(8 marks)
(4 marks)
sample number
sample mean mm
(c)
1
201.2
2
197.5
3
201.9
4
202.3
5
198.7
The process mean changed to 200.1 mm and the standard deviation remained at 2 mm.
Calculate the probability that the mean of a random sample of 8 components would be
below the lower warning limit.
(4 marks)
(Total 20 marks)
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Page 4 of 7
QUESTION 6
(a)
A company manufacturing light bulbs develops a new proces which it claims increases the life of the
bulbs. 10 bulbs from the old process are tested to destruction using the old process and a further 10
bulbs from the new process are tested to destruction.
Life using
the old
process
(hours)
2,300
2,290
2,360
2,340
2,330
2,370
2,240
2,320
2,330
2,350
Life using
the new
process
(hours)
2,290
2,300
2,370
2,380
2,360
2,380
2,260
2,330
2,340
2,370
(b)
Test whether the new process has increased the life of the light bulbs.
(c)
What is meant by Type 1 error? From your conclusions in (b) might a type 1 error
have been committed?
(12 marks)
(4 marks)
(Total 20 marks)
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Page 5 of 7
QUESTION 7
(a)
The table below shows the quarterly sales for a company in 000 units.
(b)
Year
Quarter 1
Quarter 2
Quarter 3
Quarter 4
2008
117
133
150
188
2009
143
152
177
252
2010
159
198
209
325
Calculate the centred trend values and the average quarterly variations for the time
series.
(10 marks)
(c)
Estimate the sales for quarter 2 of 2011 and comment on the likely accuracy of the estimates.
(6 marks)
(Total 20 marks)
QUESTION 8
(a)
Explain how:
(i)
(ii)
In each case give one advantage and one disadvantage of the method.
(8 marks)
(b)
The data below was obtained from counting the number of customers visiting each of two branches of
a company over a number of weeks during 2010.
(c)
Branch X
Branch Y
1516
1634
Standard deviation
158
186
32
41
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LEVEL 3
3009/2/11
Page 7 of 7