96ffx - ADM 2303 Final Examination - 1 - December 9, 1996...

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Unformatted text preview: ADM 2303 Final Examination - 1 - December 9, 1996 University of Ottawa Faculty of Administration ADM 2303: STATISTICS FOR MANAGEMENT I FINAL EXAMINATION Dec. 9, 1996 1900-2200 NAME: S.N. Section: Time: 3 hours Total marks: 60 ALL ANSWERS (INCLUDING BRIEF EXPLANATIONS) GO ON THE ANSWER SHEET. THESE EXAM QUESTION SHEETS WILL NOT BE MARKED. However, space is provided here for your rough work. These question sheets must be deposited in the box provided. NOTE THAT THERE ARE MARKS FOR EXPLAINING YOUR ANSWERS, SO MAKE SURE YOU INCLUDE BRIEF EXPLANATIONS ON THE ANSWER SHEET. IF YOU USE IDEAS RELATING TO PARTICULAR PROBABILITY DISTRIBUTIONS, THERE WILL BE MARKS FOR IDENTIFYING THE DISTRIBUTION. Calculators, 1 sheet of notes, and approved statistical tables permitted (MBB or signed by J C Nash). Q 1. You are hired to examine some figures relating to commercial insurance for the carnival / amusement industry. You are concerned that safety inspectors' reports show that 12% of equipment ("rides") that is inspected fails an inspection in any given year. However, only 0.02% of such equipment each year has suffered incidents that resulted in payments for damages or injury. There are 15,500 pieces of equipment in North America. However, your company would only be concerned with 235 of these. a) [ 7 ] What is the probability that the number of rides of the 235 associated with your company that would fail inspection is less than 24? b) [ 4 ] What is the probability no ride in North America has a liability claim next year? c) [ 4 ] One inspector is thought to be too casual in his inspections. You ask him to inspect 10 rides that have already been inspected and of which 4 are "faulty". After he has inspected 5 randomly selected rides, he states that 4 out of 5 are OK. What is the probability that he would actually get a set of rides with just one faulty out of the five selected? d) [ 2 ] If the inspector is correct that 4 of the 5 selected rides are OK, does this mean that he should be trusted as an inspector? Explain briefly? (This is a thinking question that does NOT depend on course material.) e) [ 5 ] If you selected 5 rides at random anywhere in North America, what is the probability that at least 2 would fail an inspection? ADM 2303 Final Examination - 2 - December 9, 1996 Q 2. You run an oilwell equipment company that must be ready to supply equipment anywhere in the world at short notice. Having been on the job for several years and also studied statistics, you know that equipment orders may arrive at any time of the day or night and that the rate of arrival is constant and defined by a rate of 7 jobs every 28 days. a) [ 5 ] You and your spouse want to celebrate your 5th Wedding Anniversary at a nearby luxury hotel....
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96ffx - ADM 2303 Final Examination - 1 - December 9, 1996...

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