Questions and Answers of Business Statistics In Practice

A small lawn mower company produced 1,500 lawn mowers during the year. In an effort to determine how maintenance-free these units were, the company decided to conduct a multi-year study of these
The highway department wants to estimate the proportion of vehicles on Ontario’s Highway 401 between the hours of midnight and 5 a.m. that are 18-wheel tractor trailers. The estimate will be used
According to the Stern Marketing Group, 9 out of 10 professional women say that financial planning is more important today than it was five years ago. Where do these women go for help in financial
What proportion of commercial airline pilots are more than 40 years of age? Suppose an analyst has access to a list of all pilots who are members of the Air Line Pilots Association. If this list is
According to Human Resources and Skills Development Canada, the average workweek in Canada was 36.5 hours. Suppose this figure was obtained from a random sample of 20 workers and that the standard
The following data are the revenue and total CEO compensation for 25 large Canadian companies.Use the data to compute a correlation coefficient, r, to determine the correlation between company
Suppose milk is produced in a certain area. Some people might argue that because of transportation costs, the price of milk in stores increases with the distance of markets from that area. Suppose
Can the annual new orders for manufacturing be predicted by raw steel production? Shown here are the annual new orders for 10 years and the raw steel production for the same 10 years. Use these data
It appears that, over the past 50 years, the number of farms in Canada declined while the average size of farms (in hectares) increased. The following data show five-year interval data for Canadian
In an effort to determine whether any correlation exists between the share prices of airlines, an analyst sampled six days of activity on the stock market. Using the following share prices of Air
Fill in the blanks.1. Descriptive statistics can be used to _____ the data to describe a data sample either numerically or graphically.2. Statistical inference is inference about a _____ from a
Match the level with the correct measurement.1. Nominal a. Measures with a fixed zero that means “no quantity”; a constant interval (distance on the scale)2. Ordinal b. Measures require
Fill in the blanks.The value halfway across the class interval (calculated as the average of the two class endpoints) is called the class __________. For each class, the individual class frequency
Time-series data represent data gathered for a particular characteristic over a period of time at regular intervals. Draw the outline of a time-series graph for each of the following variables.a.
1. Match the measure of central tendency with its correct definition.2. What are the differences between the mean, median, and mode? What are the advantages and disadvantages of each measure?3. Is
1. What is the first step in constructing a graph of statistical data?2. Draw the outline of a histogram for each of the following descriptions.a. A set of quiz scores where the quiz was very easyb.
1. True or false? Pie charts are an effective way of displaying data if the intent is to compare the size of a slice with the whole pie, rather than comparing the slices among themselves.2. What type
Draw the outline of a scatter plot for each of the following sets of two numerical variables.a. The mass and height of 30 people selected at randomb. The mass and IQ of 30 people selected at randomc.
1. The more dispersed the data are, the larger the range, the interquartile range, the variance, and the standard deviation will be. True or false? Explain.2. If a set of data contains observations
1. Briefly explain the following terms: experiment, elementary events, sample space.2. How would you draw a diagram to represent(a) The intersection(b) The union of two events?3. What is the
1. How is union probability different from joint probability?2. Can joint probability ever be greater than union probability? Explain.3. How is marginal probability different from conditional
1. Under what condition can you use the special law of addition instead of the general law?2. If you apply the general law of addition where the special law may be used, would your calculations be
1. Under what condition can you use the special law of multiplication instead of the general law?2. Under what conditions are the general law and the special law interchangeable?
1. Using an example, explain the difference between unconditional probability and conditional probability.2. What is the relationship between conditional probability and independent events?
Both conditional probability and Bayes’ rule incorporate in their calculations what we already know. In what way are they different?
1. Characterize the following random variables as either discrete or continuous.• The number of heads in 25 tosses of a coin• The amount of gasoline you put in your car• The duration of your
1. What is a discrete distribution? Can you provide a rough example based on your personal experience?2. What conditions must be satisfied by the outcome probabilities in a discrete distribution?
1. List the key characteristics of a binomial experiment.2. Give an example of a binomial random variable. What do the values of the variable represent? How are the values of the variable defined?
1. What are the key characteristics of the Poisson distribution?2. Assume that x = 0, 1, 2, 3, . . . is a random variable that follows a Poisson distribution. What do the values of x represent?
1. What are the key characteristics of the hypergeometric distribution?2. The hypergeometric distribution applies only to experiments in which the trials are done without replacement, while the
1. List two important properties of the uniform distribution.2. Describe a situation (in business or otherwise) in which the use of the uniform distribution would be appropriate. Clearly define the
1. Why is it convenient to use a normal distribution to approximate a binomial distribution? Under what conditions is this approximation appropriate?2. Explain why and how we make a continuity
1. List four important properties of the exponential distribution.2. Can you think of a couple of real-life situations (in business or otherwise) where the use of the exponential distribution might
1. What is the basic difference between a random and a nonrandom sample?2. Suppose there are 100 students in your class. You are asked to pick four students at random. You look around and pick four
1. What do you understand by the central limit theorem and why is it relevant?2. What happens to the sample mean as you increase the sample size?3. What is a finite population? What is the finite
For what kind of data would you use the sampling distribution of proportions?
What is the meaning of the following terms: decision alternatives, states of nature, and payoffs?
Canada’s new housing price index has been steadily increasing over the years. Given below are data for Canada’s new housing price index between 2003 and 2018. Use these data to determine the
The residual diagnostics for the multiple regression analysis for the data given in Problem 13.32 follow. Discuss any potential problems with meeting the regression assumptions for this regression
Take the first 10 observations in Table 13.1 and perform a multiple regression on these data. What is the R2? How much of this R2 can be attributed to chance?Data from table 13.1 TABLE 13.1 Real
A business analyst developed a multiple regression model to predict the average price of a meal at a restaurant in a western city. After exploring several variables that might affect the average
A business analyst gathered 155 observations on four variables: job satisfaction, occupation, industry, and marital status. She wants to develop a multiple regression model to predict job
A marketing analyst carries out a survey to assess whether the amount of money a customer spends in a clothing store depends on how the customer feels about the value he receives, the perceived
In the following output, the variable “Service” is coded 0 for general medical hospitals and 1 for psychiatric hospitals. Shown below is Minitab output from a logistic regression attempt to
Shown below is Minitab output from a logistic regression attempt to predict if a family is from outside a metro area by annual food spending by household. Families residing in metro regions are coded
A logistic regression analysis was done in an attempt to predict the value of industrial shipments by the number of production workers. For the purposes of this analysis, Value of Industrial
Logistic regression analysis was used to develop a model to predict if a company was a North American company based on its Market Value. A variable was coded 1 if the company headquarters was located
Given below are the population, number of households, and average income for 10 Canadian cities. Use the data to develop a regression model to predict average income from population and number of
This problem includes the consumer price index for a Canadian city over a period of 30 months. Also displayed are some of the major components of the index: beef, chicken, eggs, bread, and coffee.
Use the following time-series data to answer the given questions.a. Develop forecasts for periods 5 through 10 using 4-month moving averages.b. Develop forecasts for periods 5 through 10 using
Determine a possible frame for conducting random sampling in each of the following studies.a. The average amount of overtime per week for production workers in a plastics company in Manitobab. The
A particular automobile costs an average of $21,755 in British Columbia. The standard deviation of prices is $650. Suppose a random sample of 30 dealerships in Vancouver and Victoria is taken, and
Suppose the average client charge per hour for out-of-court work by lawyers in Saskatchewan is $125. Suppose further that a random telephone sample of 32 lawyers in Saskatchewan is taken and that the
A survey of 2,645 consumers by DDB Needham Worldwide showed that how a company handles a crisis when at fault is one of the top influences in consumer buying decisions, with 73% claiming it is an
Suppose you are sending out questionnaires to a randomly selected sample of 100 managers. The frame for this study is the membership list of the Board of Trade. The questionnaire contains demographic
A business analyst is conducting a study of Loblaw supermarkets across the country. How can she use cluster or area sampling to take a random sample of employees of this firm?
A directory of personal computer retail outlets in Canada contains 12,080 alphabetized entries. Explain how systematic sampling could be used to select a sample of 300 outlets.
The average rent of a one-bedroom apartment in a town is $850 per month. What is the probability of randomly selecting a sample of 50 one-bedroom apartments in this town and getting a sample mean of
According to the International Atomic Energy Agency, electricity per-capita consumption in Canada was 16,621 kWh in 2016.5 A random sample of 51 households was monitored for one year to determine
Marketing companies are turning to mobile media for new opportunities. A recent study by IBM showed that 46% of all marketers conduct transactions on mobile websites. Suppose a random sample of 300
In a particular area in the Prairies, an estimated 75% of the homes use heating oil as the principal heating fuel during the winter. A random telephone survey of 150 homes is taken in an attempt to
According to Statistics Canada, the average hourly wages in the manufacturing sector are as follows: Alberta: $26.50, Ontario: $24.69, British Columbia: $26.47.6 Suppose 40 workers are selected
Give a variable that could be used to stratify the population for each of the following studies. List at least four subcategories for each variable.a. A political party wants to conduct a poll prior
A survey shows that a typical business traveller spends an average of $280 per day in Toronto. This cost includes hotel, meals, car rental, and incidentals. A survey of 60 randomly selected business
1. Explain why it is important to calculate the confidence interval in addition to calculating the point estimate of a population parameter.2. Explain what being 95% confident that the population
Use the following information to construct the confidence intervals specified to estimate μ.a. 95% confidence for x̄ = 25, σ = 3.5, and n = 60b. 98% confidence for x̄ = 119.6, σ = 23.89, and n =
In the late 1970s, Kip Tindell (chairman and CEO), Garrett Boone (chairman emeritus), and John Mullen (architect) drew up plans with products that were devoted to simplifying people’s lives, such
1. When is it appropriate to use the confidence interval based on the t distribution for the population mean?2. List two important properties of the t distribution.3. What is the behaviour of tα and
1. Provide a couple of business examples where the confidence interval of the population proportion might be useful.2. Explain how the standard error of the population proportion behaves as the
Why is it that some business analysts do not include the technique presented in this section for estimating the population variance among their statistical repertoire?
1. When calculating the sample size for estimating the population mean or the population proportion, is there ever a need to take a preliminary sample? Why?2. Should we always round up the calculated
A&W is one of the most recognizable and popular brand names. The company opened its first drive-in restaurant in Canada in Winnipeg in 1956 and now has over 950 locations from Vancouver Island to
1. The null hypothesis is denoted by __________, while the alternative hypothesis is denoted by __________.2. Explain what rejection and nonrejection regions are and how they relate to hypothesis
1. Explain what a p-value is and how it is used in hypothesis testing.2. Explain how a p-value relates to the rejection and nonrejection regions in hypothesis testing.
1. Even if σ is unknown, what is the assumption about the probability distribution of the population for the measurement being studied?2. Under what conditions should we use a z test or a t test
Are the conclusions from a hypothesis test about a variance useful and reliable if the population for the measurement being studied is not normally distributed?
1. What is an operating characteristic (OC) curve?2. What is a power curve?3. What is the relationship between sample size and the location of the rejection limits?
Seitz LLC, an ISO 9001-2008 certified organization, is a leading designer and manufacturer of thermoplastic motion control systems and components and an industry leader in plastics and gear trains.
1. The sampling plan calls for selecting two independent samples in order to use Formulas 10.1 and 10.2 to estimate the difference in two means. Explain in your own words what it means for the two
1. Under what conditions should we use a z formula when dealing with the difference in two means? A t formula?2. Are the conclusions from this section useful and reliable if the populations for the
1. Provide a few examples of situations in which the two samples being studied are related or dependent.2. Explain how data collection for dependent samples differs from data collection for
1. Is the F test of two population variances extremely sensitive to violations of the assumption that the populations are normally distributed? What is the key implication of this?2. Explain why we
Because of uncertainty in real estate markets, many homeowners are considering remodelling and constructing additions rather than selling. Probably the most expensive room in the house to remodel is
Eleven employees were put under the care of the company nurse because of high cholesterol readings. The nurse lectured them on the dangers of this condition and put them on a new diet. Shown are the
Is there a significant difference in the fuel efficiency of a car for regular unleaded and premium unleaded gas? To test this hypothesis, an analyst randomly selected 15 drivers for a study. They
Suppose the data shown here are the results of a survey to investigate gas prices. Ten service stations were selected randomly in each of two cities and the figures represent the prices of a litre of
Suppose a recent study showed that the average annual amount spent by a Nova Scotia household on hotdog wieners was $23.84 compared with an average of $19.83 for Alberta households. Suppose a random
Test the following hypotheses by using the given data. Let α equal 0.05. Ho: P₁-P₂ = 0 Ha: P1 - P20 Sample 1 n₁ = 783 x₂ = 345 Sample 2 n₂ = 896 x₂ = 421
A study was conducted to compare the salaries of accounting clerks and data entry operators. One of the hypotheses to be tested is that the variability of salaries among accounting clerks is the same
A national grocery store chain wants to test the difference in the average mass of turkeys sold in Guelph, Ontario, and the average mass of turkeys sold in Sudbury, Ontario. According to the
A tree nursery has been experimenting with fertilizer to increase the growth of seedlings. A sample of 35 two-year-old pine trees is grown for three more years with a cake of fertilizer buried in the
As the prices of heating oil and natural gas increase, consumers become more careful about heating their homes. Analysts want to know how warm homeowners keep their houses in January and how the
A study by Colliers International presented the highest and the lowest global rental rates (in U.S. dollars) per year per square foot of office space. Among the cities with the lowest rates were
Why do employees blow the whistle on other employees for unethical or illegal behaviour? One study conducted by the American Institute of Certified Public Accountants (AICPA) reported the likelihood
A large manufacturing company produces computer printers that are distributed and sold all over Canada. Due to lack of industry information, the company has a difficult time ascertaining its market
A manufacturing company produces plastic pipes that are specified to be 25 cm long and 0.3 cm thick with an opening of 1.9 cm. These pipes are moulded on two different machines. To maintain
1. Explain in your own words the meaning of an experimental design.2. Define the terms treatment variable, classification variable, factor, level, and dependent variable.
Some Toronto Stock Exchange analysts believe that 24-hour trading on the stock exchange is the wave of the future. As an initial test of this idea, assume that the Toronto Stock Exchange will open
With headquarters located in Brantford, Ontario, ASCO Valve Canada is one of Canada’s top producers of solenoid valves. The company was founded in 1965, and since that time it has emerged as a
1. Explain the difference between the treatment variation and the error variation.2. What are the three assumptions that underlie analysis of variance?3. How is the F value conceptually defined in

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