Indian Institute of Management Bangalore

Introduction to Statistical Methods

MIDTERM
Max points: 50 Name:__________________
Time : 90 minutes
I. (20 points) Roll No.:________________
State, clearly, all your assumptions, if any.
(Do all your rough work in the blank side of these pages)

The Indian army, after the recent clashes decided to evaluate a new gun called Bi-fours (it
is so called because its range is claimed to be at least16 kms). They have hired the
services of Kanaka, who recently graduated from IIMB. Kanaka selected a simple
random sample of size 25 and calculated the sample average. Based on the sample
average and the as given by the manufacturers, she calculated a 90%, two sided
confidence interval for the . When she increased the confidence level to 95%, the width
of the interval increased by 504 meters.

1. What is the value of ?














2. What is the standard error of the sample mean?













3. What should be sample size, if she wants to achieve a confidence level of 95%
and at the same time retain the width of the 90% confidence interval that she got
with a sample size of 25.












4. What percentage of the sample means will fall with in 1000 meters of the
population mean () (use sample size 25)













5. Kanaka decided to test the claim of the manufacturers using a one sided
hypothesis test. If she has obtained a sample mean (from the sample of 25
observations) of 17,600 meters, what is the maximum possible value for ? State
clearly, your null and alternate hypotheses.












II. (30 points)

The amount of waste material produced, in tons per day, in the Reliable Chemical
Industries (RCI) is a random variable with the following density function:

f(x) = (x-1) for 1 x 2
f(x) = - (1/6) * (x-2) for 2 x 5
and f(x) = 0 otherwise.

1. What is the probability that the waste material produced is between 3 and 4 tons
on a particular day? (4 points)
















2. What is the modal value of the distribution of the random variable? (4 points)

















3. If the waste material produced per day is less than 2 tons, the day is considered to
be Q1 (First quality); if it is between 2 tons and 2.55 tons per day, the day is
considered to be M1 (medium quality) and if it is more than 2.55 tons per day it
considered to be L1 (lousy quality). What is the probability that a day selected at
random will be L1 day? (4 points)













4. What is the median value of the random variable? (4 points)













5. The probability that a day selected at random turns out to be Q1 is 0.25. If 200
days are selected at random, what is probability that there are 45 to 52 days of Q1
type? Should you or should you not use the continuity correction? Explain using
your results.( 4 points)









6. The probability that a day selected at random turns out to be Q1 is 0.25. The
Company hired Kanaka as a consultant to see that there are more number of Q1
type days. Kanaka was informed that she was given 10 days time and within the
10 days, she has to obtain 6 days of Q1 type. Whenever she gets 6 days of Q1
type, her objective is deemed to have been achieved and she is paid her full fee.
Define a random variable X= no. of days Kanaka has to spend with the company
to achieve her objective. Calculate the probability associated with each of the
possible values of X. (10 points)