Question 1 (20 marks)

Smoking Habit
Hypertension
Non Smokers Moderate Smokers Heavy Smokers Total

Yes 21 36 40 97
No 49 26 28 103
Total 70 62 68 200

a) Explain THREE (3) different approaches in probability theory for decision making.
Give an example for each approach.
[8 marks]
b) Compute the probability of choosing Moderate Smokers OR Heavy Smokers.
[4 marks]

c) Compute the probability of choosing a Hypertension patient AND Moderate Smoker

[4 marks]

d) Given that the person selected is Non Hypertension patient, compute the probability
of choosing a Non Smoker.
[4 marks]

Question 2 (15 marks)

(a) How much does a typical family of four spend at McDonalds restaurant per visit? The
amount is normally distributed random variable whose mean is RM58.5 and the
standard deviation is RM2.50
(i) Find the probability that the family spends less than RM55? [2 marks]
(ii) Find the probability that the family spends between RM55 to RM60?
[3 marks]

(b) Previous studies from a recruitment agency found out that 1 out of 5 candidates fail in
the job interview due to sitting posture. Assuming 4 candidates has been selected for
further studies, what is the probability of at least 2 candidates fail the job interview?
[5 marks]

1
(c) The accounting manager reviewed the error committed by the data entry clerk. The
number of errors is Poisson distributed with a mean of 2.5 errors per 100 data entry.
What will be probability of NO errors if the accounting manager randomly checks 100
data entry in the system?

[5 marks]

Question 3 (20 marks)

An advertising company intends to study the impact of time spent on social media is more
than 30 hours/week. The standard deviation is 3 hours/week. A random sample of 50
subjects were studied where sample mean is 32.5 hours/week. Assume 5% significant
level

a) Formulate the null and alternate hypotheses [2 marks]

b) What will the inferences at 5% significant level [8 marks]

c) What is the definition of Type 1 and 2 Error in Hypotheses and the relevant Type 1
and 2 error in this scenario [5 marks]

Question 4 (10 marks)

The production manager wanted to evaluate the effectiveness of a new bottling conveyer
setup. A random sample of 20 bottles is selected, and the sample mean and standard
deviation of carbonated soft drink per 1.5-litre bottle are 1.465 and 0.233 respectively.
(Assume distribution is NOT normal with unknown population variance)
a) Formulate the null and alternative hypotheses. [2 marks]
b) What will be the inferences from this experiment at 5% significant level?
[5 marks]
c) What will be confidence interval at 95% interval? [3 marks]

2
Question 5 (20 Marks)
A real estate agent wants to know the relationship between the size of apartment (in
square feet) and the selling prices (in $000) in a city in Selangor. The result of the survey
has been summarized as follow:
Size Apartment Price ($000)
(square feet)
650 105
700 115
750 120
800 160
850 165
900 180
950 210
1000 250
1100 280
1200 350

a) Determine the Dependent and Independent Variable [2 marks]

b) Describe the relationship through a scatter diagram [3 marks]
c) What is the strength of the relationship? [5 marks]
(Hint: Compute the correlation coefficient, r formula given below)
( ).( )
r=
[ 2 ( )2 ].[ 2 ( )2 ]

A management consultant helps to draw statistical relationship through least squared

regression. The results is indicated table below

Table 5.1: Summary Output for ANOVA Table

Source Degree of Sum of Squares
Freedom
Regression 1 554.23
Residual 8 15.30
Total 9 569.53

3
Table 5.2: Summary Output for Estimation
Coefficients Standard Error
Intercept (b0) 20.32 2.371
Size (b1) 4.46 0.262

a) Interpret the meaning of b1 in this estimation. [3 marks]

b) Calculate the coefficient of determination (R2). Interpret this statistic. [2 marks]

c) Do these statistics (in ANOVA Table) provide enough evidence to conclude at the 5%
significance level that the model is useful in predicting the monthly rental cost for an
apartment? Demonstrate your answer. [3 marks]

d) What should the management consultant advise on the limitation of this model?
[2 marks]

4
Question 6 (15 marks)
For each of the following, indicate which time series component is represented. Provide
your reasoning.

(a) Lecturers of the School of Business find that Friday is the most popular day of the
week for students absenteeism from classes.
[2 marks]

(b) Peak of retail sales in Malaysia peaks every month of December.

[2 marks]

(c) Sales of a Dengue vaccine increase after the product receives positive publicity in
newspapers and/or medical journal articles.
[2 marks]

The following table showed the demand forecast over the months collected by a supply
chain planner.
d) Develop the simple centered 5 point moving average for the demand series. Interpret
the result. [6 marks]
Period Demand (00)
1 25
2 30
3 39
4 28
5 21
6 18
7 37
8 50
9 29
10 50

e) Comment on the moving average method [3 marks]