07 STAT HWA q sampling - Dr. V.R. Bencivenga Economics 329...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Dr. V.R. Bencivenga Economics 329 PRACTICE ASSIGNMENT #7A: SAMPLING For each question (except problem 1), give (i) the sample statistic, (ii) the sampling distribution of the sample statistic, and (iii) the reason why the sample statistic has this sampling distribution, based on the assumptions of the question. This information is necessary to receive credit. Note: If the tabulated c.d.f. you have is not sufficiently detailed to give a final answer on an exam, just write down the probability you would look up if you had a more detailed table. 1. (Review of the normal probability model) Suppose that you are the manager of a plant that manufactures disk dr ives for PC’ s. One of your machines produces a component part for these drives. The width of this part is important to operation of the disk drive. If width is below 3.995 millimeters (mm) or above 4.005 mm, the drive will not work properly and the part must be modified at a cost of $10.40 before it can be used. The machine is set to produce parts with a width of 4 mm, but it is not perfectly accurate. Widths of parts are normally distributed with mean 4 mm, and a variance that depends on the speed at which the machine producing them is operated. There are two speeds, high and low. At the high speed, the machine is less precise. If the machine is run at a low speed, the variance is.00000361, and if it is run at a high speed, the variance is .00000676. Of course, the high speed means more parts can be produced per day, thus lowering the average cost of manufacturing a disk drive. If the part is produced at a high speed, the cost of the disk drive is $20.45, while if the part is produced at a low speed, the cost of the disk drive is $20.75. (This does not include the cost of modifying a too-wide or too-narrow part when necessary.) The question you face as plant manager is whether you should run the machine at the high speed or the low speed. You want to choose whichever strategy has the lower expected final
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/26/2012 for the course ECONOMICS 329 taught by Professor Bencivenga during the Spring '12 term at University of Texas at Austin.

Page1 / 3

07 STAT HWA q sampling - Dr. V.R. Bencivenga Economics 329...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online